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What is a short sale?
A short sale is a transaction where the seller's bank has lien(s) against the property for more than what the property is worth and the seller request that the bank release the lien for a sale price that would not ordinarily be enough to pay off the lien in full. It allows you to sell your home for less than the outstanding loan balance and forgive you of any remaining unpaid principal balance.

Do we have to pay you for your services?
Our fees are generally paid by the lender out of the sale proceeds making our service free of charge to you. Lenders are willing to do this because if they have to foreclose, they still would have to pay a broker to sell the property along with other expenses.

How does a property owner sell short
Selling short is not easy. The lender must be convinced that the value of the property is less than what is owed and that the foreclosure will only take more time and yield less than the short sale. That is where I come in to help prove that point.

Documents You May Need to Provide:

  • Signed Authorization;
  • Signed Financial Form;
  • Two (2) Months’ Proof of Income (W-2, cancelled checks, pay stubs)
  • Current Mortgage Statement;
  • Two (2) Months’ Checking and Savings Bank Statements;
  • Last Two (2) year's Income Tax Return Forms 1040
    Hardship Letter

IRS Tax Tip: 10 Key Points for Mortgage Debt Forgiveness

March 2, 2012

Canceled debt is normally taxable to you but there are exceptions.

One of those exceptions is available to homeowners whose mortgage debt is partly or entirely forgiven during tax years 2007 through 2012.

The IRS would like you to know these 10 facts about Mortgage Debt Forgiveness:

  1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence.
  2. The limit is $1 million for a married person filing a separate return.
  3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure.
  4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence.
  5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion.
  6. Proceeds of refinanced debt used for other purposes—for example, to pay off credit card debt—do not qualify for the exclusion.
  7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven.
  8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions—such as insolvency—may be applicable. IRS Form 982 provides more details about these provisions.
  9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed.
  10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7.

For more information about the Mortgage Forgiveness Debt Relief Act of 2007, visit IRS Publication 4681, Canceled Debts, Foreclosures, Repossessions and Abandonments, is also an excellent resource.

You can also use the Interactive Tax Assistant available on the IRS website to determine if your cancelled debt is taxable. The ITA takes you through a series of questions and provides you with responses to tax law questions

Finally, you may obtain copies of IRS publications and forms either by downloading them from or by calling 800-TAX-FORM (800-829-3676).

Related Topics: Debt forgiveness, IRS,, and mortgage debt

In New York State, Housing Counselors, who are approved by the U.S. Department of Housing & Urban Development or the New York State Banking Department, may provide the same or similar services as a distressed property consultant for free. A list of approved Housing Counselors can be found on the New York State Banking Department website at or by contacting the New York State Banking Department toll-free at 1-877-BANK-NYS (1-877-226-5697). You should consider consulting an attorney or a government-approved housing counselor before signing any legal document concerning a distressed property consultant.