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smithsussane
Joined: 18 Sep 2008
Posts: 10045
Location: Alaska
921.83 Dollars($)
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Hi Betsey!
Welcome to forums!
It is a better option to go for a deed in lieu of foreclosure rather than letting the lender foreclose the property. Your deficient balance will be forgiven by the lender. Depending upon the state laws you'll not have to pay any taxes on the forgiven amount.
Feel free to ask if you've further queries.
Sussane |
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question
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Post subject: home equity |
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| If we ask for a deed in lieu of foreclosure, are we freed from the debt of the mortgage and of the home equity loan? |
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jameshogg
Joined: 20 Dec 2005
Posts: 10164
Location: Nevada
944.24 Dollars($)
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Hi Guest,
If there are two loans on your property, then I don't think the sale of the property would recover both the mortgages. In that case, you will have to pay off the second loan. However, you won't have to pay anything on the first loan. Even if there is a deficient amount on the first mortgage, it would be forgiven by the lender.
Thanks |
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Candice
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MAC:
That is actually INCORRECT. You do not have to file a Chapter 13 to get rid of that debt and you do NOT have to file it before the debt occurred.
Chapter 7 will get rid of it as well. AND, usually, you can file on it after the sale. At my job we like to tell people that it is probably BETTER to file the bankruptcy before the finalization HOWEVER you do not have to. |
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Ann
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Post subject: 1099-A |
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I received a 2009 1099-A "Acquisition or Abandonment of Property." The existing balance of the loan is higher than the FMV. Do I have to file anything with the IRS this year? Please help.
Thanks |
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JAN
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Post subject: DEED IN LIEU vs FORECLOSURE |
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| 3 yrs ago we purchased our son's home as a non-owner occ when his current loan was an ARM and he became ill and was unemployed. 5 months ago our son passed away and being in our 60's we cannot afford to make the payments. The last payment we made was Sept. Our loan is a Fannie Mae and there is a govt freeze on foreclosing at this time. The home is in Washington State.... which would be the best way to go to avoid paying back a deficiency? Our loan is $270,000 and assessed value is $199,000 with homes here selling for under assessed value. Thanks |
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smithsussane
Joined: 18 Sep 2008
Posts: 10045
Location: Alaska
921.83 Dollars($)
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jcaal50
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I did received a 1099A. box (1) 196,000.00, and box (2) 210,000.00
was an investment proterty.
According to what I read I do not have to reported anything right?
I still do not have the 1099C. It was florclosure in july |
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smithsussane
Joined: 18 Sep 2008
Posts: 10045
Location: Alaska
921.83 Dollars($)
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Post subject: |
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Hi jcaal!
Welcome to forums!
You would receive the form 1099c only when your deficient balance resulting from the sale of the property has been forgiven. I guess, the deficient balance in your case hasn't been forgiven by the lender. Thus, you are responsible to pay it off.
Sussane |
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Angelo O.
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Post subject: 1099-A |
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Hi,
2006 I purchased my principal property for $712K put down payment of $143K and with a principal balance of $569K, I lived over a year and rented for 6 months, it was foreclosed 10/09 and the sold it for $360,000 in 12/09, a month ago my lender send me 1099-A form on box 4 the fair market value of my property was only $25K.Am I liable for repayment of debt? or cancellation of debt. Please I need your advise.
Thank you,
Angelo O |
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adonis
Joined: 22 Oct 2005
Posts: 10267
Location: ALASKA
1046.07 Dollars($)
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Welcome Angelo,
As the property has been foreclosed by the lender, you are liable for the payment of deficient amount resulting from the sale of the property. However, if the lender forgives the dues and sends you a 1099-c form, then you won't be liable to pay off the deficient balance. You need to speak to your lender and check out whether or not the deficient balance would be forgiven.
_________________
Procrastination is the enemy of your financial success |
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Allbatwings
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Post subject: Deed in lieu of foreclosure |
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| I did DIL in 1999 that states "THIS DEED IS AN ABSOLUTE CONVEYANCE, the consideration therefore being the satisfaction of all obligations secured by the Deed of Trust executed by: says my name" what happened was I got a letter from the IRS in May 2008 saying Citimortgage had sent them a 1099c for the year 2006 with a cancelled debt of $36,638.00 and are taxing me for it, my question is can they do that ? Is this correct ? It took them 7 yrs to send this 1099c to IRS (I never received one) when records show the house had sold in July 1999, Is there a statues of limitations? |
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smithsussane
Joined: 18 Sep 2008
Posts: 10045
Location: Alaska
921.83 Dollars($)
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Post subject: |
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Hi Allbatwings!
Welcome to forums!
After a deed in lieu, the lender forgives the deficient balance resulting from the sale of the property and sends a 1099c to the borrower. The forgiven amount is considered as the income of the borrower and thus, the IRS can charge taxes on that amount. As the lender has send the 1099c form after such a long time, I would suggest you to have a word with your attorney and then take a decision.
Feel free to ask if you've further queries.
Sussane |
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honest annie
Guest
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Post subject: california taxes on a foreclosure |
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| I filed chapter 7 bankruptcy in 2009 my mortgage was included, I chose to stay in my home but did not reafirm the dept. I paid 160,000.00 for my condo which is now worth 48,000.00. Now I am going to have to foreclose on my homw. Will I have to pay state taxes and if so about how much |
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jameshogg
Joined: 20 Dec 2005
Posts: 10164
Location: Nevada
944.24 Dollars($)
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Hi annie,
As you did not reaffirm your debts, the lender will not come after you for the deficient amount resulting from the sale of the property. However, this forgiven balance will be considered as your income and the IRS may charge taxes on that amount.
Thanks |
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