	AllExperts > Foreclosure
	Search

About Steele V. Propp
Expertise
Can answer all questions on all areas of the foreclosure process both judicial and non-judicial. Also on loss mitigation and foreclosure prevention including loan modification, short sales and deed in lieu of foreclosure. Also can assist with questions on purchasing property in foreclosure and already bank owned (REO, Real Estate Owned). Both as an investor and/or a homeowner.

Experience
I have 18 years of working with the foreclosure industry as a Foreclosure Specialist. Currently work with over 20 major lenders as well as a dozen asset management companies. Head up the Bank Owned Property Division of the Schatz Real Estate Group located in Minneapolis, MN. Regularly consult and advise consumers from across the county.

Organizations
I belong to the Realtor Association at the National, State and Local levels. Also the Real Estate Investors Association. The Real Estate Educators Association. As well as number foreclosure industry organizations.

Publications
Consumer Reports, Money magazine, Consumer Digest and many local and national newspapers.

Education/Credentials
Bachelors Degree work in Psycholgy and Economics. Masters Degree work in Counseling Over 15 real estate designations. Specialized study of foreclosures and real estate.

Awards and Honors
Diamond Award from the Certified Residential Specialist (CRS) origanization. Chapter of the Heart as President of the Minnesota CRS Chapter

Past/Present Clients
GMAC Asset Management, First American REO, HomEquity REO, Keystone Asset Management and more.

You are here: Experts > Real Estate > Foreclosure > Foreclosure > Deficiency judgements/1099/Short Sale only

Short Sale only

Expert: Steele V. Propp - 11/7/2009

Question
QUESTION: Hi Steele! Thanks in advance for doing this for all of us.
There is so much misinformation out there and I am so confused.
Can you tell me if I am understanding this correctly?

With an "investor" short sale team, they make the offer and it goes into the short sale dept right away....
They "buy" the property from the bank.
Then negotiate on the seller's behalf to....

ELIMINATE any deficiency judgement which would normally include:
1. lender puts a lien against other property
2. sells it to a collection agency (has five years to do this)
3. makes seller sign a promissary note

In my case the deficiency is $200,000.

Now I am gathering that this is a critical area of negotiation.

Okay, so now there is now no "deficiency judgement" HOWEVER the seller does get a 1099.
And what I want is a 1099 C from the lender.

Then next: it is your CPA who gets you out of the 1099 by showing you are insolvent.

In other words, I CAN keep some of the properties. I am not doomed to give them all up
because deficiency judgements are slapped on as liens.

Is this correct thinking?

ANSWER: Based on what you are saying, I believe you are correct. The 1099 and tax forgiveness can be based on insolvency. Also,if this is a primary residence you may be forgiven regardless under the tax forgiveness act. For details just go to the IRS site:

irs.gov

This is, of course, based on if your negotiators are successful in doing what they said that they would do. Just so you know, lender are becoming increasingly leery in dealing with investors. They may not agree to work with them or come to agreement. Hopefully you have a legit source of help that you are using.

If you would like a little basic info on short sales and the process feel free to visit my website:

www.shortsalesminnesota.com

Best wishes,

Steele

---------- FOLLOW-UP ----------

QUESTION: As always, you're the best.

Should I tell the short sale team that I want my attorney (and I have a good one) involved with the final negotiations? Great info.

Answer
As long as your attorney is skilled in foreclosure law and shortsales, I would say "yes!".

The negotiations may not need his/her touch but overseeing what is happening can be a very good thing. Ultimately you want to know that what you think is happening, is happening.

At the very least I would want my attorney going over the finalized offer and approval letter from the lender with a fine tooth comb.

Steele

Add to this Answer Ask a Question