California taxes after short sale.

mofast · Joined: 29 Oct 2009 Posts: 2 1.62 Dollars($)

hi I live in California and I am on the process of a short sale house price 260k loan amount 610k what are the taxes after a short sale and is there any tax relief law or what can happen after the sale I known bank will file a 1099c for the loose amount never been late on any payment house value decreased by more than 50% bank denied two loan modifications and at this time short sale is the only way out interest rate will change on 2014 on first loan of 450k and i will have to pay in full amount the 2dn loan of 160k

adonis · Posted: Fri Nov 06, 2009 12:37 am Post subject:

Welcome mofast,

In California, as far as I know, the lender cannot sue you for the deficient amount resulting from the sale of the property. In such a case, the deficient amount would be forgiven. Depending upon the Mortgage Debt Relief Act, the taxes can be forgiven. To know more, you can check out the given page:
http://www.mortgagefit.com/california/debtrelief-act.html

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