Las Vegas Luxury Properties Link

We're number 1, we're number 1....in up-side-down mortgages. Again, not the thing you really want to be leading the nation with, but that's our market right now.  There is a great report just released from First American CoreLogic on the Fourth Quarter housing statistics.  Over 11.3 million mortgages are under water.  Nevada seems to be the epicenter of the housing meltdown, even though prices have stabilized, the numbers are surprising. Here's an excerpt from the report:

 Negative equity continues to be concentrated in five states: Nevada, which had the highest percentage negative equity with 70 percent of all of its mortgaged properties underwater, followed by Arizona (51 percent), Florida (48 percent), Michigan (39 percent) and California (35 percent). Among the top five states, the average negative equity share was 42 percent, compared to 15 percent for the remaining 45 states. In numerical terms, California (2.4 million) and Florida (2.2 million) had the largest number of negative equity mortgages accounting for 4.6million, or 41 percent, of all negative equity loans.

The blog "Calculated Risk Blog" reported:

These homeowners are far more likely to default.

The rise in negative equity is closely tied to increases in pre‐foreclosure activity and is a major factor in changing homeowners' default behavior. Once negative equity exceeds 25 percent, or the mortgage balance is $70,000 higher than the current property values, owners begin to default with the same propensity as investors.

 Here is figure 4 from the report.

The default rate increases sharply for homeowners with more than 20% negative equity.

This graph fits with figure 2 above and suggests a large number of future defaults in Nevada, Arizona, Florida and California.

The aggregate dollar value of negative equity was $801 billion, up $55 billion from $746 billion in Q3 2009. The average negative equity for an underwater borrower in Q4 was ‐$70,700, up from ‐$69,700 in Q3 2009. The segment of borrowers that are 25 percent or more in negative equity account for over $660 billion in aggregate negative equity.

Because Nevada is SO upside down, loan modification programs, and short sales have taken over our market.  Out of the 10,135 Single Family Homes, Townhouses, and Condos that are currently available on the multiple listing service in Las Vegas/Henderson, 4900 are short sales, and 1550 are foreclosures or bank owned properties.    Banks are now on board the short sale wagon.  They want to work with sellers to avoid foreclosure.  Bank of America, one of the most notorious banks in the short sale world, is the first large bank to sign on for the Second Lein Holders program-H.A.M.P. (Housing Affordable Modification Program).  If you'd like more information regarding a loan modification, please visit Making Home Afforable.   These programs also facilitate the short sale process.  Some of these programs do seem to be making a difference.  Short sale closings have increased to 22% of all home sales in January 2010.

If you would like a FREE, confidential short sale consultation, please give me a call toll free at 1-866-589-1646.  We're here to help you avoid foreclosure, get a loan modification, or assist you to short sale your home.  Certified Short Sale Professional and Certified Distressed Property Experts handle every aspect of your short sale.

Felipe Crook

Prudential Americana Group Realtors

Las Vegas, NV 89117

1-866-589-1646

I just saw some great information on THE FEDERAL TRADE COMMISSION's website about mortgages, short sales, loan modifications, and foreclosures for the consumer.   It goes over all kinds of scenarios and options people have if they are struggling with their mortgages.  This is a copy from their website. The full article is available by clicking here, or you can read below:

"Mortgage Payments Sending You Reeling? Here's What to Do

The possibility of losing your home because you can't make the mortgage payments can be terrifying. Perhaps you're having trouble making ends meet because you or a family member lost a job, or you're having other financial problems. Or maybe you're one of the many consumers who took out a mortgage that had a fixed rate for the first two or three years and then had an adjustable rate - and you want to know what your payments will be and whether you'll be able to make them.

Regardless of the reason for your mortgage anxiety, the Federal Trade Commission (FTC), the nation's consumer protection agency, wants you to know how to help save your home, and how to recognize and avoid foreclosure scams.

Know Your Mortgage

Do you know what kind of mortgage you have? Do you know whether your payments are going to increase? If you can't tell by reading the mortgage documents you received at settlement, contact your loan servicer and ask. A loan servicer is responsible for collecting your monthly loan payments and crediting your account.

Here are some examples of types of mortgages:

• Hybrid Adjustable Rate Mortgages (ARMs): Mortgages that have fixed payments for a few years, and then turn into adjustable loans. Some are called 2/28 or 3/27 hybrid ARMs: the first number refers to the years the loan has a fixed rate and the second number refers to the years the loan has an adjustable rate. Others are 5/1 or 3/1 hybrid ARMs: the first number refers to the years the loan has a fixed rate, and the second number refers to how often the rate changes. In a 3/1 hybrid ARM, for example, the interest rate is fixed for three years, then adjusts every year thereafter.
• ARMs: Mortgages that have adjustable rates from the start, which means your payments change over time.
• Fixed Rate Mortgages: Mortgages where the rate is fixed for the life of the loan; the only change in your payment would result from changes in your taxes and insurance if you have an escrow account with your loan servicer.

If you have a hybrid ARM or an ARM and the payments will increase - and you have trouble making the increased payments - find out if you can refinance to a fixed-rate loan. Review your contract first, checking for prepayment penalties. Many ARMs carry prepayment penalties that force borrowers to come up with thousands of dollars if they decide to refinance within the first few years of the loan. If you're planning to sell soon after your adjustment, refinancing may not be worth the cost. But if you're planning to stay in your home for a while, a fixed-rate mortgage might be the way to go. Online calculators can help you determine your costs and payments.

If You're Behind On Your Payments

If you are having trouble making your payments, contact your loan servicer to discuss your options as early as you can. The longer you wait to call, the fewer options you will have.

Many loan servicers are expanding the options available to borrowers - it's worth calling your servicer even if your request has been turned down before. Servicers are getting lots of calls: Be patient, and be persistent if you don't reach your servicer on the first try.

• You may qualify for a loan modification under the Making Home Affordable Modification Program (HAMP) if:
• your home is your primary residence;
• you owe less than $729,750 on your first mortgage;
• you got your mortgage before January 1, 2009;
• your payment on your first mortgage (including principal, interest, taxes, insurance and homeowner's association dues, if applicable) is more than 31 percent of your current gross income; and
• you can't afford your mortgage payment because of a financial hardship, like a job loss or medical bills.

If you meet these qualifications, contact your servicer. You will need to provide documentation that may include:

• information about the monthly gross (before tax) income of your household, including recent pay stubs.
• your most recent income tax return.
• information about your savings and other assets.
• your monthly mortgage statement.
• information about any second mortgage or home equity line of credit on your home.
• account balances and minimum monthly payments due on your credit cards.
• account balances and monthly payments on your other debts, like student loans or car loans.
• a completed Hardship Affidavit describing the circumstances responsible for the decrease in your income or the increase in your expenses.

For more information, see www.makinghomeaffordable.gov/modification_eligibility.html

If you're interested in refinancing to take advantage of lower mortgage rates, but are afraid you won't qualify because your home value has decreased, you may want to ask if you qualify for the Home Affordable Refinance Program (HARP) or the HOPE for Homeowners (H4H) program. For more information, see www.hud.gov/foreclosure.

Avoiding Default and Foreclosure

If you have fallen behind on your payments, consider discussing the following foreclosure prevention options with your loan servicer:
Reinstatement: You pay the loan servicer the entire past-due amount, plus any late fees or penalties, by a date you both agree to. This option may be appropriate if your problem paying your mortgage is temporary.

Repayment plan: Your servicer gives you a fixed amount of time to repay the amount you are behind by adding a portion of what is past due to your regular payment. This option may be appropriate if you've missed a small number of payments.

Forbearance: Your mortgage payments are reduced or suspended for a period you and your servicer agree to. At the end of that time, you resume making your regular payments as well as a lump sum payment or additional partial payments for a number of months to bring the loan current. Forbearance may be an option if your income is reduced temporarily (for example, you are on disability leave from a job, and you expect to go back to your full time position shortly). Forbearance isn't going to help you if you're in a home you can't afford.

Loan modification: You and your loan servicer agree to permanently change one or more of the terms of the mortgage contract to make your payments more manageable for you. Modifications may include reducing the interest rate, extending the term of the loan, or adding missed payments to the loan balance. A modification also may involve reducing the amount of money you owe on your primary residence by forgiving, or cancelling, a portion of the mortgage debt. Under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt may be excluded from income when calculating the federal taxes you owe, but it still must be reported on your federal tax return. For more information, see www.irs.gov. A loan modification may be necessary if you are facing a long-term reduction in your income or increased payments on an ARM.

Before you ask for forbearance or a loan modification, be prepared to show that you are making a good-faith effort to pay your mortgage. For example, if you can show that you've reduced other expenses, your loan servicer may be more likely to negotiate with you.

Selling your home: Depending on the real estate market in your area, selling your home may provide the funds you need to pay off your current mortgage debt in full.

Bankruptcy: Personal bankruptcy generally is considered the debt management option of last resort because the results are long-lasting and far-reaching. A bankruptcy stays on your credit report for 10 years, and can make it difficult to get credit, buy another home, get life insurance, or sometimes, get a job. Still, it is a legal procedure that can offer a fresh start for people who can't satisfy their debts.
If you and your loan servicer cannot agree on a repayment plan or other remedy, you may want to investigate filing Chapter 13 bankruptcy. If you have a regular income, Chapter 13 may allow you to keep property, like a mortgaged house or car, that you might otherwise lose. In Chapter 13, the court approves a repayment plan that allows you to use your future income toward payment of your debts during a three-to-five-year period, rather than surrender the property. After you have made all the payments under the plan, you receive a discharge of certain debts.

To learn more about Chapter 13, visit www.usdoj.gov/ust; it's the website of the U.S. Trustee Program, the organization within the U.S. Department of Justice that oversees bankruptcy cases and trustees.

If you have a mortgage through the Federal Housing Administration (FHA) or Veterans Administration (VA), you may have other foreclosure alternatives. Contact the FHA (www.fha.gov) or VA (www.homeloans.va.gov) to talk about them.

Contacting Your Loan Servicer

Before you have any conversation with your loan servicer, prepare. Record your income and expenses, and calculate the equity in your home. To calculate the equity, estimate the market value less the balance of your first and any second mortgage or home equity loan.

Then, write down the answers to the following questions:

• What happened to make you miss your mortgage payment(s)? Do you have any documents to back up your explanation for falling behind? How have you tried to resolve the problem?
• Is your problem temporary, long-term, or permanent? What changes in your situation do you see in the short term, and in the long term? What other financial issues may be stopping you from getting back on track with your mortgage?
• What would you like to see happen? Do you want to keep the home? What type of payment arrangement would be feasible for you?

Throughout the foreclosure prevention process:

• Keep notes of all your communications with the servicer, including date and time of contact, the nature of the contact (face-to-face, by phone, email, fax or postal mail), the name of the representative, and the outcome.
• Follow up any oral requests you make with a letter to the servicer. Send your letter by certified mail, "return receipt requested," so you can document what the servicer received. Keep copies of your letter and any enclosures.
• Meet all deadlines the servicer gives you.
• Stay in your home during the process, since you may not qualify for certain types of assistance if you move out. Renting your home will change it from a primary residence to an investment property. Most likely, it will disqualify you for any additional "workout" assistance from the servicer. If you choose this route, be sure the rental income is enough to help you get and keep your loan current.

Housing and Credit Counseling

You don't have to go through the foreclosure prevention process alone. A counselor with a housing counseling agency can assess your situation, answer your questions, go over your options, prioritize your debts, and help you prepare for discussions with your loan servicer. Housing counseling services usually are free or low cost.

While some agencies limit their counseling services to homeowners with FHA mortgages, many others offer free help to any homeowner who is having trouble making mortgage payments. Call the local office of the U.S. Department of Housing and Urban Development (www.hud.gov) or the housing authority in your state, city, or county for help in finding a legitimate housing counseling agency nearby. Or consider contacting the Homeownership Preservation Foundation (HPF) at 888-995-HOPE or www.hopenow.com. HPF is a nonprofit organization that partners with mortgage companies, local governments, and other organizations to help consumers get loan modifications and prevent foreclosures.

When choosing a counselor, beware of anyone charging large up-front fees or guaranteeing you a loan modification or other solution to stop foreclosure. They shouldn't be charging you high fees or making any guarantees. Take your business elsewhere.

Consider Giving Up Your Home Without Foreclosure

Not every situation can be resolved through your loan servicer's foreclosure prevention programs. If you're not able to keep your home, or if you don't want to keep it, consider:

Selling Your House: Your servicers might postpone foreclosure proceedings if you have a pending sales contract or if you put your home on the market. This approach works if proceeds from the sale can pay off the entire loan balance plus the expenses connected to selling the home (for example, real estate agent fees). Such a sale would allow you to avoid late and legal fees and damage to your credit rating, and protect your equity in the property.

Short Sale: Your servicers may allow you to sell the home yourself before it forecloses on the property, agreeing to forgive any shortfall between the sale price and the mortgage balance. This approach avoids a damaging foreclosure entry on your credit report. Under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt on your primary residence may be excluded from income when calculating the federal taxes you owe, but it still must be reported on your federal tax return. For more information, see www.irs.gov, and consider consulting a financial advisor, accountant, or attorney.

Deed in Lieu of Foreclosure: You voluntarily transfer your property title to the servicers (with the servicer's agreement) in exchange for cancellation of the remainder of your debt. Though you lose the home, a deed in lieu of foreclosure can be less damaging to your credit than a foreclosure. You will lose any equity in the property, although under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt on your primary residence may be excluded from income when calculating the federal taxes you owe. However, it still must be reported on your federal tax return. For more information, see www.irs.gov. A deed in lieu of foreclosure may not be an option for you if other loans or obligations are secured by your home.

Be Alert to Scams

Scam artists follow the headlines, and know there are homeowners falling behind in their mortgage payments or at risk for foreclosure. Their pitches may sound like a way for you to get out from under, but their intentions are as far from honorable as they can be. They mean to take your money. Among the predatory scams that have been reported are:

• The foreclosure prevention specialist: The "specialist" really is a phony counselor who charges high fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. None of the actions results in saving the home. This scam gives homeowners a false sense of hope, delays them from seeking qualified help, and exposes their personal financial information to a fraudster.
  
  Some of these companies even use names with the word HOPE or HOPE NOW in them to confuse borrowers who are looking for assistance from the free 888-995-HOPE hotline.
• The lease/buy back: Homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the "rescuer" walks off with most or all of the equity.
• The bait-and-switch: Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don't know they've been scammed until they get an eviction notice.

For More Information

To learn more about mortgages and other credit-related issues, visit www.ftc.gov/credit and MyMoney.gov, the U.S. government's portal to financial education.

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices in the marketplace and to provide information to help consumers spot, stop, and avoid them. To file a complaint or to get free information on consumer issues, visit ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357); TTY: 1-866-653-4261. The FTC enters consumer complaints into the Consumer Sentinel Network, a secure online database and investigative tool used by hundreds of civil and criminal law enforcement agencies in the U.S. and abroad. "

If you would like more specific information regarding your situation please contact Felipe Crook toll free at 1-866-589-1646 or email me at felipe@felipecrook.com

Felipe Crook

Prudential Americana Group Realtors

Las Vegas, NV 89117

1-866-589-1646

I have been working with short sale and foreclosure for the last two year in Las Vegas and sometimes I want to scream at how stuborn some banks have become.  They are clearing cutting off their nose to spite their face.  I've given up trying to understand the logic behind their choices, but I'm not giving asking for short sale approvals.   I was recently contacted by a local lawyer who has a very interesting and LEGAL way to deal with banks not approving a short sale or the banks insistance for a deficiency judgement.  

 Jim Stout of the Stout Law Firm wrote a great article about dealing with these pesky banks. Full Article.  His contact information is:

James R. Stout, Esq.
STOUT LAW FIRM
4560 South Decatur Boulevard., Suite 201
Las Vegas, Nevada 89103
Tel: 702-794-4411
Fax: 702-794-4421
jstout@jstoutlaw.com

He also offer FREE consultations which is rare for a law firm.  Here's the article:

"Leasing out your home to a renter during the short sale negotiation process is fraught with risks for the homeowner, lender and renter. The homeowner and renter risk the lease agreement being declared void by a judge. The lender risks the lease agreement being declared valid by a judge. It is a way, however, that the homeowner can earn a monthly payment from the home, a much needed benefit, since his home will ultimatley cost him dearly.

THE HOMEOWNER SHOULD DISCLOSE HER INTENTIONS TO THE LENDER

If the homeowner decides to lease out the home during short sale negotiations, all documents related to the lease should be disclosed before, during and after the execution of the lease. Once the lender becomes aware of the homeowner's intent, the lender must choose between a) accepting the short sale and waiving the deficiency judgment, or b) rejecting the short sale, foreclosing and geting stuck honoring a long-term lease.

If the lender rejects the short sale and chooses foreclosure, it will get stuck with a tenant, or at least having to be the landlord to a valid lease. TITLE VII-PROTECTING TENANTS AT FORECLOSURE ACT SENATE BILL 896 requires the new owner (bank) to honor the existing lease, unless the new owner will live in the home. If the new owner will live in the home, the new owner must provide a 90 day notice.

THE LEASE MUST BE PROVEN TO BE BONAFIED

After the lender forecloses and takes title to the house, it must then chooose between a) honoring the lease pursuant to federal law, b) challenging the lease in court as invalid, or c) paying off the renter to get out of the lease.

A lease will be considered bonafied, and valid if it was executed before the "foreclosure notice" and:
(1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant;
(2) the lease or tenancy was the result of an arms-length transaction; and
(3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit's rent is reduced or subsidized due to a Federal, State, or local subsidy.

The lender will try to get out of the lease by arguing that the lease was entered into after the foreclosure notice; the homeowner and renter were in collusion; and the monthly rental rate is below market.

PROVING THE LEASE RESULTED FROM AN ARMS LENGTH TRANSACTION REQUIRES PROVING THE PARTIES WERE NOT IN COLLUSION

The arm's length principle (ALP) is used specifically in contract law to arrange an equitable agreement that will stand up to legal scrutiny, even though the parties may have shared interests (e.g., employer-employee) or are too closely related to be seen as completely independent (e.g., the parties have familial ties).

A simple example is the sale of real property from parents to children. The parents might wish to sell the property to their children at a price below market value, but such a transaction might later be classified by a court as a gift rather than a bonafide sale, which could have tax and other legal consequences.

To avoid such a classification, the parties need to show that the transaction was conducted no differently than it would have been for an arbitrary third party. This can be done, for example, by hiring a disinterested third party such as an appraiser or broker, who can offer a professional opinion that the sale price is appropriate and reflects the true value of the property.

EXPERT TESTIMONY CAN BE USED TO PROVE THE RENT IS AT MARKET RATE

The lender's defense that the rent is below market rate can readily be defeated through testimony from a seasoned Las Vegas real estate appraiser stating that the market rate for renting a home that is in default is 10% (or whatever deep discount) of renting the same house out prior to default. Who wants to enter into a long-term lease if the house is on the verge of a foreclosure sale? As long as the lease agreement specifically calls for "market rate" or even a few hundred dollars a month, it should easily defeat the not at market rate defense.

PROVING THE LEASE WAS EXECUTED BEFORE FORECLOSURE REQUIRES ESTABLISHING THAT FORECLOSURE BEGINS WHEN TITLE TRANSFERS

The defense that the lease is invalid because it was entered into "after foreclosure" is up for debate. Technically speaking the homeowner will argue, foreclosure begins after title is transferred, not after the Notice of Default was mailed which is what the lender will argue. When foreclosure actually begins has not been adjudicated in Nevada as it applies to the law here. Like most cases, the judge will have to make a ruling after hearing from both sides. This issue has not been settled by the courts.

STATES HAVE EXISTING LAWS THAT CAN BE USED AS GUIDELINES TO DETERMINE IF A LEASE IS BONAFIED

There are several elements which are used in other state jurisdictions as considerations to validate a lease document and demonstrate the parties' intent. These elements may or may not be considered by Nevada judges. Those elements include:
1) the length of the lease, including the beginning and ending date;
2) a statement giving the lessor the complete and exclusive use of the property for the entire duration of the lease;
3) execution in good faith, without deceit or fraud;
4) a sufficient description of the leased property;
5) a statement that the lease contains the complete and sole agreement;
6) a provision that the lessee will pay an agreed amount of rent; and
7) a statement containing the due date, frequency and address for payment of the rent.

CONCLUSION

If the judge validates the lease, the renter can live in the house for the term of the lease. If the judge invalidates the lease, the renter moves out and having learned a lesson, tries it again, under different terms, with hope that the judge will approve the lease next time."

If you have any information about property value or would like some more information on the short sale process, please feel free to call Felipe Crook directly at 1-866-589-1646.  I will help any way I can.

Felipe Crook

Prudential Americana Group Realtors

7475 W. Sahara Ave Ste 100

Las Vegas, NV 89117

1-866-589-1646

With more and more foreclosures on the rise, banks are starting to cross the line with their "potential" new properties.  I am currently working on a short sale in Las Vegas for a client who is unable to make payments.  I've submitted the entire short sale package to the lien holder Aurora Loan Services.  We received the offer and have worked with them every step of the way, providing all necessary documents in order to approve the short sale.   Every time I call, they tell me the same thing over and over "We will review the documentation and will respond within 60-90 days."  Great, I'll keep checking in just to make sure.

     Two weeks go by, and I went to the property to make sure it was still secure and a new mechanical lock box is attached to the door. Hmmmm....that's weird.  When I took the key out of MY lock box, the key didn't work.  HUH??  The bank had apparently used my lock box to key the lock on the door.  The is totally normal with a foreclosure, but this bank has NOT FORECLOSED ON THIS PROPERTY!! Where do these bank get the idea that they can change locks on a property that is not theirs yet?

This is a small reminder to all banks: People are trying to do the right thing by short selling their homes.  We don't want any more foreclosures in our neighborhoods, and we want to work things out with our banks.  But the banks have to help this process!  Get your acts together and streamline this process so we can start to recover from this recession.   Changing locks of people's properties BEFORE YOU OWN IT IS ILLEGAL! Every step of the way, banks are putting up more road blocks.  Please, stop making your own rules.

If you are looking to short sale your home and want more information on the process, please visit my website: Las Vegas Short Sale Connection or give me a call toll free at 1-866-589-1646.

Felipe Crook

Prudential Americana Group Realtors

Las Vegas NV 89117

I recently was able to help a client remove a federal tax lien from her property so we could short sell it.  Ok, if that's a lot of confusing terms, let's start with Short Sale.   A Short Sale is when a seller is trying to sell a property for less that what is owed on the property.  The bank who holds the mortgage has to approve the sale of the property in order for title to change names into the new buyers name. You can read even more about Short Sale by visiting my posts at http://www.LasVegasShortSaleConnection.com. I'm not quite sure why they call this type of transaction a short sale, because it typically takes a lot longer than a traditional transaction.   Bank have been so inundated with short sales, that they do not have the staff to cope with the thousands and thousands of short sale packages they are receiving each and everyday.  Having said that, the process is getting better and is becoming more streamlined.  I have a current buyer who got an approval on his offer in 30 days!! That's remarkable compared to the 200 day waits other clients have seen.

Anyway, in a short sale, the bank pays all of the real estate commission which is a question I hear all the time.  The bank will decide on the commission amount, the amount of closing cost it will consider for the new buyer, and all of the fee that you would normally see on a settlement statement.  The sellers DO NOT pay real estate commission.  If you have a federal tax lien on the property, all liens must be removed or discharge before clear title can be conveyed to the new buyer.  One of my clients recently had a tax lien and she was FREAKING out that the short sale processed was ruined.  After some carefully investigating on the IRS website and a few phone calls, I was able to find out how to discharge the lien in order to sell the home.  Here's a list of what they require:

First of all, there is no form to fill out. It's simply a letter typed out with certain verbiage and I would list each item in the package you're sending:

• Description of the property (Full Address) requesting the lien removal
• Show when the owner will be divested of all rights (The approval letter from the bank.  Sometimes the bank won't issue the release until the lien is discharge, but the IRS won't discharge until the bank approves the short sale.  That was an interesting hurdle to cross, but the IRS was shockingly helpful. GO IRS!!)
• A full copy of the lien OR a Pre-Liminary Title Report (Your Realtor should be able to provide this to you)
• A list of encumbrances OR a Pre-Liminary Title Report (Your Realtor should provide this or he's doing a bad job)
• A estimated HUD-1 showing all expenses of the property.
• An Appraisal of the property or two Broker Price Opinion from two disinterested parties qualified to give an opinion of value (I was able to use the bank's appraisal of the property instead of getting a comparative market analysis from colleagues of mine.)
• Your Full name, address, phone numbers and contact information where you can be reached.
• If you have an attorney, provide his contact information
• You must also copy a perjury statement VERBATUM and sign the letter.
• Also, you will need to get your escrow officer handling your short sale to sign an Tax Information Authorization.  Make sure you specifically name your escrow officer and not the entire title company.  That form is 8821 and can be downloaded from this link.

The full instructions available from the IRS.gov website is available by visiting this link:

Certificate of Discharge of Property from Federal Tax Lien

Now, all of this sounds like a lot of work, but actually your realtor will need to gather most of this documentation anyway.  Now, once you send it to the appropriate Tax office, (make sure you send it by certified or overnight mail so you can track the package) they will contact your escrow officer and start the process.  The have a total of 30 days to issue a letter of discharge.  When I sent my client's package overnight on a Monday, the package was received on Tuesday.  They called my escrow officer in TWO DAYS!! I was shocked.  After sending the IRS email statements from my client's lender, they issued a letter of discharge for the lien in one week.  I was absolutely, pleasantly surprised.   That was the easiest part of the short sale process.   It is definitely worth doing if you're serious about short selling your home.  If you'd like to discuss your options for your home, please contact me toll free at 1-866-589-1646 or email me at felipe@felipecrook.com.

Felipe Crook

Prudential Americana Group Realtors

Las Vegas NV 89117

1-866-589-1646