What’s that mean?

It means that if you are considering a short sale and/or foreclosure the time to act is yesterday. That’s because the amount a lender forgives on a primary residence will be taxable on federal income taxes the second the clock strikes midnight on Jan. 1, 2013.

Indeed, banks must sign off on a deal, as well as agree to release the distressed homeowner from the debt/shortfall before Dec. 31, 2011.

Currently, under the five-year plan, the Internal Revenue Service (IRS) “allows taxpayers to exclude income from the discharge of debt on their principal residence…. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.”

In 2013?

Sun-Sentinel breaks it down:

” … if a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 in they’re in the 25 percent bracket; $7,500 if in the 15 percent tax section. Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter.”

Yuck.

With short sales taking perhaps several months to complete, if not longer, underwater homeowners — or those on the fence — should make their decisions sooner rather than later to avoid Uncle Sam hitting them hard on their taxes.

There’s no word at this time if the debt relief act will be extended again or modified to include “pending” short sales as the deadline approaches.

Stay tuned.

“Like I always said, if I’m one of the top players in the game, pay me like I’m one of the top players in the game.”

– Terrell Owens

Former National Football League (NFL) wide receiver, Terrell Owens — who banked somewhere in the neighborhood of $100 million in salary, excluding sponsorship/endorsement deals, throughout his colorful 14-year career on the gridiron — recently rid himself of a $2 million condominium located in Dallas, Texas.

However, Owens — who played for the Dallas Cowboys from 2006 to 2008 — had to negotiate a short sale, accepting $1.6 million (about a $400,000 shortfall) rather than losing the property to foreclosure. FOXSports.com reports that this isn’t the first time that the outspoken and controversial wideout has made a short sale play, selling off another property at a $56,000 loss not too long ago.

The six-time Pro Bowl selection, who cracked into the league back in 1996 with the San Francisco 49ers where he played eight seasons, has experienced major financial problems since his involuntary exit from the sport last year because of a knee injury. In fact, he barely avoided jail time a few months for failing to pay child support for his young daughter in Atlanta, Georgia.

Owens, 38, who trails only NFL Hall of Famer Jerry Rice in all-time career touchdowns and receiving yards, recently held a highly-publicized workout for NFL teams in an attempt to keep his career alive. Not a single team attended and Owens remains a free agent.

The $7 million home of super successful singer/songwriter, Rihanna, in Beverly Hills, Calif., is the subject of a real estate short sale, according to several published reports.

The Barbadian beauty closed on the newly-built, eight-room expanse back in 2009; however, it’s apparently been nothing but a money pit ever since she assumed ownership.

In fact, the “Umbrella” pop sensation, 23, recently filed a lawsuit against the homebuilder, alleging that poor construction has led to major flooding problems that have caused significant damage. As a result, she has listed the mansion on the market for $4.5 million and will “consider all offers,” meaning that she is willing to accept less than what is owed on the mortgage to expedite her exit.

Typically, the lender that holds the note is tasked with making those types of shortfall decisions; however, it’s unclear if the lawsuit, which names essentially every party involved in the transaction, including the selling agent, will have an impact on the eventual outcome.

Ironically, her decision to get out of dodge appears to coincide with her abusive ex-boyfriend, Chris Brown, recently purchasing a $1.6 million home nearby. Brown, of course, was sentenced to five years probation and more than 1,400 hours in “labor-oriented service” for assaulting Rihanna back in 2009.

Sometimes things really do seem to happen for a reason.

Check out complete details of Rihanna’s water-logged short sale house after the jump (via RealEstalker):

“Listing information from that time Miss Riri purchased the property shows the gated contemporary crib sits heavily on .86 hill top acres at the tail end of a short cul-de-sac and measures more than 10,000 square feet over three floors with 8 bedrooms and 10 bathrooms. The heart of the hulking house is a dramatic airplane hangar-sized living/dining area with milk-chocolaty hardwood floors, fireplace, towering walls of glass with city to ocean views, and glass-railed bridge that connects two second floor wings of the modern mansion. Other interior spaces include a den/family room with fireplace, eat-in kitchen with not just one but two gigantic center islands, office, staff quarters, art studio, fitness room, media/music room, wine cellar and home theater with wide screen and state-of-the-art projection equipment. The gated grounds encompass a tight motor court with two-car attached garage, flat lawn the narrows to a small sun deck with city and ocean views, and a small swimming pool and spa surrounded by an entertainment terrace and deck cantilevered over the canyon.”

For more celebrity-related distressed real estate situations be sure to check out our complete archive on the topic right here.

Nothing is “reportedly” working. Not consistently, anyway, to stem the foreclosure tide and help distressed homeowners keep roofs over their heads.

But, alas, there is the story of Deborah Johnson in the Herald Tribune today, which details the “offer she couldn’t refuse” from her mortgage lender, JP Morgan Chase.

Behind on her mortgage for nearly two years, and seemingly headed for foreclosure, Johnson thought she had exhausted all options. But then Chase called her up one day and offered to forgive $100,000 of her debt, as well as give her $35,000 cash, to move out of her Sarasota, Fla., home.

The catch? All she had to do was agree to a short sale and help find a new buyer to live in her four-bedroom Lockwood Lakes home.

With cash in her pocket, credit salvaged and comfort knowing that she would not be pursued by creditors in the future, Johnson accepted the offer and is currently helping the bank show the home, which is on the market for $118,000, to prospective/buyers investors.

So what’s in it for CHASE, or any other lender in a similar situation? Company spokeswoman Nancy Norris explains the reasoning:

“Foreclosure is a very expensive process for a bank to go through, and in Florida it takes a long time. A short sale gets the same job done in a much shorter period of time, it’s better for the community, it’s better for the homeowner.”

Talk about making the best out of a bad situation.

Local experts were stunned to learn about the offer, calling it a “home run,” comparing it to “hitting the lottery” and referring to it as the “damndest thing I’ve ever heard.”

To search for short sales and other distressed real estate for sale in Florida — or in your local area — click here. On the other hand, if you are having trouble making your mortgage payments contact your lender as soon as possible.

“… buyers – largely investors – are snapping up homes at bargain prices.”

– Lawrence Yun, Chief Economist, National Association of Realtors®

Cash-laden investors are cherry-picking discounted foreclosure, short sale and other distressed real estate deals at an increasing rate, according to the latest report from the National Association of Realtors® (NAR).

In fact, distressed properties accounted for 39 percent of homes sold nationwide in Feb. 2011, which is up two percent from last month and is five percent more than last year at this same time.

Investors accounted for 19 percent of all sales activity during this time and all cash sales reached a record 33 percent in Feb. 2011, too.

What’s it all mean?

It’s pretty simple: If you’re in the market for a home, you need to act fast because the best deals will be gone before you know it.

Cash is king … especially in a housing market like the one. And investors will continue to reign supreme for as long as the competition (that’s you) sits on the sidelines and watches opportunity pass by.

There are programs like Fannie Mae’s “First Look” that offer first-time homebuyers and local communities with opportunities to buy before properties go to market. It’s a clever safety net, but it doesn’t stop all the great deals from landing in the hands of investors.

Not even close.

A fantastic way to stay on top of the latest distressed real estate deals entering the market is to take advatage of our free foreclosure email alerts. When a new foreclosed home for sale in your area becomes available we notify you with an email that same day.

It’s an awesome resource.

Or, you can do what most investors and bargain hunters do and search our database each day for great discounts on real estate. It’s free for seven days! Click here.

If you think that a foreclosure and/or short sale will help you improve your distressed situation moving forward, and that you can just cut your losses free and clear, think again.

The Detroit News passes a long a helpful nugget of advice about mortgage deficiency judgements, which is essentially a tool that lenders can leverage to recoup some of their losses by coming after borrowers who defaulted on their mortgages.

And in some cases, they can wait years before coming after you.

Here’s the skinny:

“Now, mortgage lenders can start selling their deficiencies to make up some of their loan losses, unleashing debt collectors who may wait years to file suit — well after foreclosed homeowners have rebuilt their financial lives and have assets that can be pursued for collection.”

Scary stuff, considering that these creditors have the authority to garnish wages and seize property to settle debts.

So how do you avoid a deficiency judgement?

This is how:

“The best way for borrowers to avoid the problem is to get a release from the lender in a short sale or, in the case of a foreclosure, file for bankruptcy.”

Watch your back!

That’s the wild real estate ride that Alexis Bellino — from the “Real Housewives of Orange County” — and her husband Jim have taken with their Newport Beach, Calif., mansion over the last year.

Orange County Register reports that the Bellinos recently unloaded their cushy six-bedroom, five-bathroom luxurious property for a cool $3 million, which is $395,000 less than the asking price, in a short sale transaction.

The identity of the bargain buyer was not revealed in the article, but he or she was represented by Banker Previews International.

And based on the description of home, which sits on a 9,135-square foot double lot, it appears that the new owner got a relative steal.

Here are just some of the many features:

“High ceilings, gorgeous crown molding, pristine wood floors, and a grand staircase … a state-of-art kitchen, wine cellar, home theater and large recreational area with pool table & bar…. There’s also a wrap-around balcony, rooftop view deck, a gym and a six-car garage.”

Alexis and Jim also revealed that they has as much as $6 million invested in the property. And despite all the mortgage wrangling and deep price cuts — the home was listed for $4.9 million as recently as Nov. 2010 — the couple denies having financial problems.

To read more about the Bellinos, as well as the real estate troubles of many other lovely ladies from the hit Bravo-produced show, click here.

Short sales are a hot topic these days.

It should come as no surprise, considering these real estate transactions now represent a huge share of the housing market because of their tremendous profit potential.

Short sales are simple math:

Lenders agree to sell distressed properties for less than is currently owed on the mortgage balances because the current owners are (likely) in — or about to — default. Bargain-hunting buyers (that’s you) score great deals and often enjoy instant equity bumps since they’re paying less than the properties are actually worth.

This month’s edition of “Investment Exchange” is devoted to acquainting (or reacquainting) you with short sales. You’ll find tips and tricks to make the process go smoothly, plus the new number one way to find qualified short sale listings in your area (For a hint click here).

To read this month’s free educational newsletter from Foreclosure.com, which is entitled “ABCs (and $$$s) of Short Sales,” CLICK HERE.

Boca Raton, Fla. — Jan. 20, 2011 — Foreclosure.com today announced that it recently added thousands of short sale properties for sale to its industry-leading, nationwide database of more than 2 million distressed real estate listings.

To search for potential short sale homes for sale in your area visit http://www.foreclosure.com/short_sale/ today.

What is a short sale property?

A short sale is a home that is for sale for less than the mortgage balance owed to the lender. It essentially short circuits the foreclosure process, allowing the distressed homeowner to sell a home that he or she can no longer afford at a price that is in-line with current market values.

And while the short sale process is often considered time-consuming, clunky and difficult, Foreclosure.com Vice President James Houston explains that the listings offered through the website are already bank-approved and ready to sell fast.

“The industry has come a long way in a relatively short amount of time in regard to short sales,” says Houston. “Banks and lenders have become increasingly more willing to set competitive sale prices even if it means doing so at a loss – the alternative (foreclosure) often costs them much more over time.”

Increased staffing, cutting-edge automation technology and government incentives, according to Houston, are the primary factors behind the latest increases in short sale closings. In fact, a recent report from the Palm Beach Post reveals that the short sale homes for sale in South Florida grew nearly 50 percent in 2010.

That’s a trend that Houston says will continue in Florida, and most likely across the board nationwide, as the short sale process continues to improve over time.

“Foreclosure.com only lists bank-approved short sales, meaning that we’ve eliminated the negotiation and other roadblocks that often derailed short sale deals in the past,” he said. “Banks need to sell these homes today, not tomorrow. So the prices often can’t be beat.”

Foreclosure.com already offers the most comprehensive, accurate and current collection of preforeclosure, foreclosed homes for rent-to-own, foreclosure, Sheriff sale, foreclosure auction, bank repossessed (bankruptcy), HUD homes and tax lien listings in one convenient location.

To search for potential short sale homes for sale in your area visit http://www.foreclosure.com/short_sale/ today.

Boca Raton, Fla. — Jan. 4, 2011 — The Agent University, which is administered through Foreclosure.com, and The CE Shop today announced that the companies have teamed up to offer real estate agents with even easier access to the best online short sale training certification program in the nation.

The Agent University’s Certified Short Sale Agent (CSSA) certification program is now featured on The CE Shop website, which offers real estate professionals online courses that meet their states’ continuing education requirements.

For more information regarding the short sale training and continuing education opportunities available through The Agent University please visit The Agent University or call us at (866) 382-4445.

CSSA training, which has been implemented at more than 300 Realtor® boards nationwide, can earn real estate agents up to six continuing education credits in select states, as well as prepare them to find, negotiate and close short sale transactions in record time.

“Having this industry-leading certification program online with the added benefit of also earning continuing education credits will make agents more profitable,” says The Agent University Director of Education, Linda Yates.

Real estate agents are required to accumulate a set number of continuing education credits to meet their state licensing requirements, making CSSA an ideal option that also helps grow business exponentially.

The CSSA course is self-paced with exams, activities, tips and forms available all at the touch of a mouse. Upon completion of the course, agents are featured in a national broker network with visibility to millions of buyers, sellers and asset managers throughout the United States.

Business-building CSSA course highlights include, but are not limited to:

1. Strategies that will improve your chances of receiving the most commission from each transaction.
2. Forms and documents that will significantly increase the profitability of your short sale business.
3. A detailed explanation of the short sale transaction process and how it differs from traditional sales transactions.
4. Directions on putting together short sale packages that will generate more closings.
5. Tips on automating and streamlining your short sale process using the latest technology.
6. Powerful short sale marketing strategies that will help you reach more buyers for a fraction of your current budget.

“Serious real estate agents and brokers understand the value of timely education on the latest industry trends,” says Yates. “Getting a specialized certification along with continuing education credits and marketing all in one makes sense. In this unpredictable market, education is critical to staying ahead of the competition and providing clients with the most accurate information.”

For more information regarding the short sale training and continuing education opportunities available through The Agent University please visit The Agent University or call us at (866) 382-4445.

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About The Agent University
The Agent University offers serious real estate professionals the best selection of training opportunities and certification programs available in the industry today. Our designations are universally recognized as the standard of excellence. Certified agents stand out among their peers, closing more deals and earning higher commissions. We provide agents with invaluable knowledge, skills and tools that ensure consistent success … even in the most challenging markets. Our industry-leading certification programs, Certified Foreclosure Agent, Certified Short Sale Agent, Certified Commercial Foreclosure Agent and REDC Certified Auction Agent, offer varying degrees of participation at the lowest possible prices.

About The CE Shop
The CE Shop Inc. was founded with the mission to serve the licensed real estate professional with high quality, hassle-free and simple online continuing education. Headquartered right in the middle of it all in Fargo, N.D., The CE Shop team includes real estate industry experts from across the country as well as knowledgeable content and curriculum designers, marketing and sales professionals, compliance and operation specialists, distance learning technologists, financial and legal experts and our outstanding customer service team.