14 May Are Foreclosures Really Slowing Down?
Are foreclosures really slowing down? This question was answered. According to Realty Trac, the answer is yes. It seems the number of foreclosures that were filed were down by 2% over last year. So, what we are really playing is a numbers game. This statistic doesn’t mean that people aren’t losing their homes, it only means that the number of foreclosures has gone down.
In Southwest Florida, the numbers have gone down as well, but even though the numbers have gone down, they are still way too high.
In our office, we are seeing quite a few short-sales. While I was always against short sales, my thinking has changed over time for two reasons. If the short sale is occurring on the homestead and the individual is eligible for relief on the deficiency, it will be in the clients best interest to short sale. The other scenario is a higher net worth individual who is not eligible for the tax relief, yet can absorb the tax hit. In several cases, when we ran the numbers, it would be advantageous for our clients to short sale a property, negotiate for a 1099 and then pay the tax on the income. Although this sounds crazy at the outset, it actually has become a strategy for some of our clients to pursue.
Another strategy which has decreased foreclosures is “Deeds In Lieu”. This is a process whereby an individual gives the property back to a lender rather than go throug the foreclosure process. There are several companies in town which claim to be helping consumers deed the property back to the bank. I can’t say with any degree of certainty how successful they are; however, I believe that I will find out in the future when all of the individuals they claim they are helping find their way to my office with significant tax problems. The topic of taxes is covered very well by Kent Anderson and his blogs.
So, the answer is yes, the number of foreclosures are slowing down, but the number of people losing their homes is still going up.
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