D.I.L. 1099 or full foreclosure?

Guest 0.10 Dollars($)

i'm between a rock and a hard place........if the bank accepts a D.I.L. on my second home (150k bank loss) will I get hit with a 1099 and have to pay taxes? If that is the case should i follow the advise of others and go for a full foreclosure, avoid a tax hit and hope they dont seek a deficiency judgment. What are the odds in Florida after i default on my second home?

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.80 Dollars($)

Hello gilmore.

Welcome to the forums.

If the mortgage company accepts the deed in lieu then they will not demand the deficiency judgment but it will have a negative affect on your credit report. Even you need not to pay tax to IRS because of the Mortgage Debt Forgiveness Act. But if you consider foreclosure then the lender will come after you for the deficiency judgment and you will also have the negative affect on the credit report.

Feel free to ask the community if you have further questions.

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