Hi,
I met a real estate agent today to start working on my short sale (Purchase Price: $499K, Current Comp Market Value: $300K, 2 loans both from one lender). Husband was laid off this month so we are losing 50% of our income and will no longer be able to afford a $3500/month mortgage payment.
Based on our discussion, he said that since I live in California, the following rules apply:
1. since I lived in the property for more than 2 years and I did not refinance and still in my original loan terms and it is a primary residence of the family, no deficiency judgement will be collected.
2. he also mentioned that purchase money loans get a $500K tax credit. So no 1099c either.
3. Short Sale process will take about 6 months on average....and notice of default will be received on average after 6-8 months since 1st missed payment...
Also, he did tell me that I do not need to pay anything for the short sale unless the bank asks me to cover some of the transaction costs (e.g. closing costs, etc). And, there will be no need for a real estate attorney since most likely there will be no court proceedings...
Can anybody confirm this based on their knowledge/experience?
Also, what is a purchase money loan? How can I know if mine is one?
Thanks for your help. Appreciate if fellow Cali residents can share their short-sale stories so I can learn more on the state short-sale laws.