REAL ESTATE LAW UPATE: Trustee’s Sale

This article courtesy of real estate attorney Scout Souders.

  1. After Foreclosure Sale Trustee’s Deed Upon Sale Does Not Need To Be Recorded Prior To Serving Notice To Quit.

In the case of Dr. Leevil, LLC vs. Westlake Healthcare Ctr. [2017] 9 Cal App 5th 450 the Appellate Court held that a notice to quit was not premature even though the new owner, who received title at a foreclosure sale, had not recorded a Trustees Deed yet.

In this case the defendant was a medical center who had a Lease in a medical building. The Lease had an automatic subordination clause and a permissible subordination clause as well. [Read more…]

How Long Must I Wait?

How long must I wait before obtaining financing after bankruptcy, foreclosure or short sale? This is a question asked more and more due to the financial changes and hardships that many have faced in recent years. I have provided the following chart to help answer those questions.  (You can download a printable PDF copy here.)

Don-Parsons-Commerce-How-Lo

 

Real Estate Law Update: Judgment Against Broker Dischargeable in Bankruptcy

$900,0000.00 Judgment Against Broker Dischargeable in Bankruptcy Despite the Salesperson Agent’s Fraud Who Works for the Broker.

In the case of Anil Sachan vs. Benjamin Huh (9 Cir. BAP) 2014 506 B.R.257, the 9th Circuit Bankruptcy Appellate Panel concluded that when a broker is not aware of his agent’s fraud, a state court judgment against the broker is 9th Circuit Bankruptcy Appellate Panel In this case, the judgment against the broker for vicarious liability was $900,000.00.

The 9th Circuit Panel concluded that “imputed” liability is not enough to bar the debtor from obtaining his discharge. Here in this case there was no evidence that the broker knew of the facts that led to the agent’s fraud in the agent’s representation of the Plaintiff. In light of the fact that the creditor failed to prove the broker knew or should have known of these facts the court declined to bar the broker’s discharge solely on the basis of principal/agent relationship.

Update provided by Scott Souders, Attorney at Law

Scott Souders is a real estate attorney who has practiced real estate law in excess of 38 years in Southern California.

Disclaimer: The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.

Update provided by Scott Souders, Attorney at Law

Scott Souders is a real estate attorney who has practiced real estate law in excess of 38 years in Southern California.

Disclaimer: The Real Estate Law Update cites cases or statutes which are summarized and should not be relied upon without fully reading the cases or statute in the advance sheets and shepardizing the same and consulting with your own attorney.

Lender Cancelled or Forgiven Mortgage Debt

debt-forgivenessIf your lender canceled or forgave your mortgage debt, you generally have to pay tax on that amount. But there are exceptions to this rule for some homeowners who had mortgage debt forgiven in 2012. The IRS has released some facts about mortgage debt forgiveness. Canceled debt normally results in taxable income, but you may be able to exclude the canceled debt from your income if the debt was a mortgage on your main home.

To qualify, you must have used the debt to buy, build or substantially improve your principal residence. The residence must also secure the mortgage. The maximum qualified debt that you can exclude under this exemption is $2 million. The limit is $1 million for a married person who files a separate tax return.

You may be able to exclude from income the amount of mortgage debt reduced through mortgage restructuring. You may also be able to exclude mortgage debt canceled in a foreclosure. You may also qualify for the exclusion on a refinanced mortgage. This applies only if you used proceeds from the refinancing to buy, build or substantially improve your main home. The exclusion is limited to the amount of the old mortgage principal just before the refinancing. Proceeds of refinanced mortgage debt used for other purposes do not qualify for this exclusion.

For example, debt used to pay off credit card debt does not qualify. If you qualify, report the excluded debt on Form 982, Reduction of Tax Attributes Due To Discharge of Indebtedness. Submit the completed form with your federal income tax return.

Other types of canceled that do not qualify for this special exclusion. This includes debt canceled on second homes, rental and business property, credit cards or car loans. In some cases, other tax relief provisions may apply, such as debts discharged in certain bankruptcy proceedings. Form 982 provides more details about those provisions. If your lender reduced or canceled at least $600 of your mortgage debt, they normally send you a statement in January of the next year. Form 1099-C, Cancellation of Debt, shows the amount of canceled debt and the fair market value of any foreclosed property. Finally, check your Form 1099-C for the canceled debt amount shown in Box 2, and the value of your home shown in Box 7. Notify the lender immediately of any incorrect information so they can correct the form. But here you go: http://www.IRS.gov/U AC/newsroom/important-fax-about-mortgage-debt-forgiveness.

When Can I Apply For a New Mortgage? (after shortsale, foreclosure or bankruptcy) Fannie Mae-Freddie Mac Announce 2011 Waiting Periods

For several years now homeowners who have filed bankruptcy, lost their home to foreclosure or sold their home in a “short sale” have asked, “when can I apply for a new mortgage?”

Fannie Mae and Freddie Mac have published their rules on bankruptcies and foreclosures for years.  However, though they have had a category called pre-foreclosure sales  there has not until recently been a category under “shortsale”.

In the most  recent publication of rules and waiting periods, Fannie Mae and Freddie Mac have addressed this category as well.  And, based on the new rules, it appears to be advantageous to consider the short sale over foreclosure, at least as it relates to a “waiting period” for reapplication.

However, in every consideration regarding financial hardships and the dispostion of a real estate property,  it is advisable to obtain expert legal counsel from a real estate attorney who specializes in shortsales and foreclosure law.  Following is a link to a “summary” of the new rules.  Feel free to contact my office for further information.

Click her for the new 2011 waiting periods