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April 21 – May 4, 2012 Attorney FROM PAGE 1

Short sale vs. foreclosure Before deciding which route to

choose, homeowners should first educate themselves on exactly what a short sale or foreclosure entails. “Short sales and foreclosures both

have different issues associated with them,” Kuzmich explains. “Foreclosure is one of the remedies afforded the lender when a homeowner is no longer making the loan payment and is in breach of the promissory note. Short sales are a consensual and negotiated agreement between the bank and the homeowner whereby the bank agrees to release its lien on the property for less than the amount owed.” Maintaining a property during the

foreclosure process is the responsibility of the homeowner, something Kuzmich says many people are unaware of. “Unknowing homeowners will

frequently abandon the home and leave it to the bank expecting to be free of any further issues. But abandoning the property is a violation under most deeds of trusts and could subject the homeowner to additional liability to the bank despite a foreclosure.”

Lingering liabilities There are other obligations

homeowners face after a distressed sale, and the price tag for these can easily reach thousands of dollars. “The homeowner will also need to

be concerned with the tax implications associated with the disposal,” Kuzmich

COUNSELOR: Lawyer, broker and agent Jim Kuzmich helps navigate the choppy waters of distressed real estate sales. STSN photo

cautions. “When a bank forgives any amount of debt owed, the IRS treats the debt forgiveness as income to the homeowner resulting in a potential requirement to pay tax on the income. It is recommended that a homeowner considering a short sale or foreclosure consult a qualified tax advisor on specific tax implications.” Perhaps the most detrimental long- term effect will be a drastic reduction

in the homeowner’s credit score, says Kuzmich.

“In addition to having potential financial liability even after the property is sold, homeowners also face a significant credit hit that will affect their purchasing power for years.”

Knowledge is power Having knowledgeable representation is essential to getting the best outcome


in a distressed sale, especially in Phoenix’s volatile market. “I began advising homeowners on the legal aspects of short sales and foreclosures in 2007 when a family friend was required by his employer to relocate and could not sell his house for what he paid for it,” explains Kuzmich. “Since that consultation, I have conducted hundreds of home loan consultations and have spoken on various short sale panels throughout the Valley. I have also spoken at many real estate brokerages to assist them in understanding the legalities of short sales and foreclosures.” Kuzmich, whose diverse practice includes corporate, intellectual property and sports and entertainment law, has since become an expert in local real estate. A certified agent for several Major League Baseball players and a voting member of the Academy of Country Music, Kuzmich places special emphasis on aiding homeowners who find themselves in difficult circumstances. “My goal is to educate clients to the best of my ability and help them make the best possible decision available to them.”

Kuzmich can be reached at

480-628-6175 or by visiting

Miriam Van Scott is a former Kerby

Estates resident who can be reached at



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