We have all read the news that the home foreclosure rate is skyrocketing, and it is not something you’d want to experience first-hand. When you do get yourself in that situation for whatever reason, going into a mode of not answering the phone and feeling sorry for yourself won’t do you much good. As an alternative to avoid foreclosure in Fairfax, a short sale may not be such a bad idea so it would be best to get hold of reliable professionals to assist you with that short sale so you can save your home from foreclosure.

In essence, during a short sale, this transaction lives up to its name because the purchase price agreed upon is much lower than the amount owed on the mortgage. When market conditions cause home values to decline, a short sale occurs in which a bank agrees to take less money for a property than the amount owed on the mortgage; if the amount owed is $100,000, the bank may be willing to ’short sale’ it for just $80,000 as banks generally do not want to own real estate, and would rather settle for less money from an able buyer. Naturally a $20,000 discount can be earned from this deal which makes it very appealing from the perspective of an able buyer. The homeowner is not out of the woods yet as a debt balance remains even after the short sale.

The difference between the short sale price and the original mortgage can be paid through the two options offered by mortgage companies. By agreeing to any of these two options, it implies you agree to still owing a considerable sum of money on your mortgage. A foreclosure deficiency judgment or a 1099 form can be served by the mortgage company to claim the remaining balance not paid in the short sale. Based from the earlier example, with the use of a deficiency judgment the mortgage company can demand the remaining difference of $20,000 from the mortgagee.

After you completely avoid foreclosure in Fairfax with a short sale the mortgage company can file for a deficiency judgment against you. It’s like being sued and if the judge rules in the mortgage company’s favor you will still owe the mortgage company the remaining mortgage debt on your former property. When you can no longer make the payments on your home, don’t give up as most mortgage companies don’t want to go through the trouble of filing a deficiency judgment if you can prove bankruptcy. Instead they will deduct that $20,000 as a business loss and send you a 1099 form.

If you receive a 1099 form instead of filing for a foreclosure deficiency judgment you will have to list that $20,000 as income on your taxes, but you may only owe 10 - 15% of this income on the 1099 to the IRS. At the end of the year, the amounts listed in the 1099 will have to be declared as income. The income declared in the 1099 will be taxed appropriately as mandated by law, based on the fact that it is still income earned, but it will not significantly impact the tax for the whole year because not much income was earned on the same year. In short, no matter what the income or amount is in the 1099, taxes owed on it will remain at 10% so a $20,000 income on the 1099 will yield to $2,000 worth of taxes and so on.

When you short sale to avoid foreclosure in Fairfax, you will end up owing some money. Depending on how the short sale was handled, you could end up either owing to a mortgage company or to the IRS. A debt remains after a short sale, but it is more manageable and it’s not as much as the amount in a foreclosure.

If you are still in your home you haven’t lost the battle over foreclosure so contact KDL Solutions, LLC for a quick answer to your questions…avoid foreclosure in Fairfax now.Our expert team members will help you: avoid foreclosure in Fairfax.

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