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donnaattuscany · Joined: 12 Jul 2010 Posts: 4 1.60 Dollars($)

i keep seeing on line that a deed in lieu stops you from having to owe a deficiancy. how come one of the people keeps saying make sure they don't have a deficiency on the deed in lieu. I thought it was a given especially if they give you a 1099. also how long does it take to do a deed in lieu once you hve the complete paperwork in and a pbo in.

smithsussane · Posted: Tue Jul 13, 2010 12:45 am Post subject:

Hi donnaattuscany!

Welcome to forums!

In case of a deed in lieu of foreclosure, the lender forgives the deficient balance resulting from the sale. This forgiven debt is considered as your income and a loss on part of the lender. Thus, the lender sends you a 1099c form to file with your tax returns. However, as the Mortgage Debt Relief Act is still in vogue, you won't be liable for paying the taxes on that amount. A deed in lieu may take around 90 days to complete.

Feel free to ask if you've further queries.

Sussane

Guest

What type deed? It varies in different states.

Is this a tax deed?

Tom Hines
Property Tax Default Specialist

[Email address deleted as per forum rules. Thanks.]

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