If you are a California homeowner who entered into a short sale or completed the loan modification process in 2009, chances are that you were very relieved to hear that Governor Arnold Schwarzenegger signed SB401.   This new measure was created to offer homeowners tax relief on mortgage debt that was forgiven through:

• Foreclosures
• Short sales
• Loan modifications

Before SB401 came into existence, homeowners throughout the state were exempt from paying taxes on forgiven mortgage debt.  However, they were required to pay state taxes on the supposed income they acquired through short sales, loan modifications and foreclosures.  Many people started to coin this revenue “phantom income” and thought it was unfair that they had to pay additional state taxes, especially after losing their homes and properties.

With the new measure, homeowners who filed 2009 tax returns did not have to pay taxes on the amount generated from the difference between their home sale prices and mortgage balances.  In order to be eligible for tax forgiveness, homeowners had to be Qualified Primary Residents and could not exceed $800,000 in indebtness or exceed $500,000 in forgive debt.

SB401 is a great win for many people in the state, including those who have filed for consumer bankruptcy and those who have completed or are considering short sales.  With SB401, people who decide to partake in short sales, or the Home Affordable Foreclosure Alternatives Program (HAFA), can do so without incurring additional tax consequences.  Now that these individuals do not have to worry about incurring a hefty tax bill, they have the freedom to make financial decisions that will suit their best interests instead of worrying about tax penalties.

If you would like to learn more about SB401 and how it can make the short sale process easier for you, we encourage you to speak with our knowledgeable specialists by calling 1-888-500-2632.  We would be happy to discuss SB401 with you and can provide advice on both short sales and loan modifications, ultimately allowing you to pursue of a course of action that is most beneficial for you and your family.

When it comes to the topic of loan modification, there tends to be a lot of fiction and little fact circulating, which can make it difficult for homeowners to understand their options.  If you are thinking about loan modification, this blog will be of immense help and has been created by our team of experienced, accredited and knowledgeable loan modification specialists:

Fiction:  You must be behind your mortgage to apply for loan modification.
Fact:  This is absolutely false and a popular misconception. In order to get your home loan modified, you do not have to be late on your monthly mortgage payments.  You simply have to prove to your mortgage lender that you are in danger of defaulting on your mortgage to initiate the loan modification process.

Fiction:  You can’t modify your home loan if you have received notice of foreclosure.
Fact:  Many people wrongly assume that if their lenders have issued notice of foreclosure, it is too late to pursue loan modification.  Yet, the reality is, you can still negotiate more favorable loan terms with your lenders and modify your home loan even after receiving foreclosure notices.  If you are successful with your loan modification, you can stop foreclosure and save your home.

Fiction:  You can modify your home loan on your own.
Fact:  While it is true that you can try to modify your home loan on your own, the fact is that very few homeowners have been successful when trying to seek loan modifications alone.  Many report that they found the process confusing, strenuous and complicated and most say they never completed their loan modifications.  For this reason, homeowners should always seek help from loan modification specialists instead of trying to get through the process on their own, which can cost them time and money.

Fiction:  Attorneys are best equipped to handle loan modifications.
Fact:  Attorneys are not the best choice for homeowners pursuing loan modifications.  Instead, homeowners want to work with a reputable company that specializes in modifying home loans, like American Economic Solutions (AES).  Our company is approved by the Better Business Bureau (BBB) and, unlike lawyers who claim they are loan modification experts, we can actually prove we are experts as we have successfully modified hundreds of home loans nationally.

If you would like to learn more about the facts surrounding loan medication, we strongly encourage you to contact our knowledgeable specialists by calling 1-888-500-2632!

One of the many questions that homeowners ask when they are on the verge of losing their houses is, “Will filing for bankruptcy stop foreclosure?”

The answer to this question is never easy to come up with because it depends upon the circumstances that are involved.  In some cases, the answer will be “yes” as many homeowners prevent foreclosure by filing for Chapter 13 or Chapter 7 bankruptcy.  Unfortunately, in other cases, the answer will be “no”.

After people file for consumer bankruptcy, an automatic stay is issued.  This stops creditors and collectors from calling people to collect debts that they owe.  However, this stay is only temporary and will only stop foreclosure for a short period of time.  Even more disheartening is the fact the mortgage lenders and banks can get around automatic stays by appealing to the court to issue lifts.  Once courts grant lifts, lenders will be free to pursue foreclosure.

You may be wondering how this is possible.  The fact is, a home is an asset that is secured by a deed of trust and your mortgage lender is allowed to ask the courts for relief from automatic stays because they financed the purchase of your property.  In order to remain in possession of your home and avoid foreclosure altogether, you will need to negotiate favorable terms with your mortgage lender.  You may also pursue loan modification or short sale by working with the team at American Economic Solutions as both of these alternatives could stop your foreclosure.

The bottom line is this, if you want to stop foreclosure, filing for bankruptcy is really a temporary solution and will provide short-term relief.  If you pursue bankruptcy, you will have to live with several consequences, such as having the bankruptcy on your credit report for up to 10 years.  Therefore, if you are facing foreclosure, it is to your advantage to consider all of your options by speaking with the specialists at American Economic Solutions.

If you are still seriously considering filing for bankruptcy, American Economic Solutions encourages you to work with our preferred partner, Scott Orona, an experienced bankruptcy lawyer.  Scott Orona has helped many homeowners get through the consumer bankruptcy process with little stress and in minimal time.  You can contact Attorney Orona directly by calling 619-306-7627 or by visiting his bankruptcy website:  http://www.sdbankruptcy.net/