Some of our clients have assets to protect yet they still wish to do a short sale, loan modification, deed in lieu or other loan workout.    

We suggest balancing the risk related to the disclosure of the size and location of assets vs. accepting a foreclosure and not engaging in a communication with the lenders loss mitigation departments. 

As your assets or salary gets more significant your need to anticpate the likely results of each type of loan workout becomes greater.

If you have assets to protect, you may wish to spend some
time thinking about how to frame your short sale package.  

-   What happens if your short sale does not close or your loan mod or deed and lieu is rejected? (The national association of Realtors says that over 80% of the short sales listed do not close.)

-  You need to know ahead of time if your lender is likely to ask for a large cash contribution, a large promissory note, or approve your short sale but reserve the right to collect a deficiency.  Your short sale team needs unparalleled experience and understanding of the law. 

-  You need to understand the timing of when and if you have to disclose the existence of those assets.  It is our opinion some assets do not need to be disclosed.    
- You need determine how the lender will react to those assets.

- You need to consider tax exposure to the IRS and the California Franchise Tax board.

- Sometimes banks do overstep their limits and you need a negotiator who can negotiated a more limited disclosure.

- You should create a backup plan in case your initial workout plan does not go according to schedule.