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Can foreclose on my second home but continue to pay on my primary residence? will they come after that property? Also, I heard that in AZ, if you foreclose, the forgiven debt (i dont know if that's what you call the amount i wont be paying on the mortgages?) will not count as income and they will not come after you. Is this true? Then wouldn't alot more people be foreclosing? Does this mean the only reprocussion is the 250 drop in your credit score? there has to be more right?

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Oh, i'm finding out some other negatives:

i have a second mortage on that home that was not home improvements...so it looks like if i walk away from the [url=http://www.mortgagefit.com/second-mortgage.html]second mortgage[/url], i will have to pay taxes on the amount of the loan (140 thousand :( ).

Like | Dislike | Share | Posted: Wed, 05/20/2009 - 07:18 | Post subject:

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savior70 | Joined: March 25, 2009 05:14 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi

If your second house is foreclosed on and there is a deficiency from the sale of the house, there are chances that the mortgage holder can come after your other properties. But since your primary residence is not a collateral against the loan you've defaulted on, it'll not be foreclosed. The mortgage holder can place a lien on it though. As far as the deficient amount is concerned, it is seen by the IRS as an income and is thus taxable. The state laws don't apply here because you pay this tax to the federal govt and not to your state govt. Nevertheless, you can get tax deductions on the forgiven loan amount under Mortgage Forgiveness Debt Relief Act.

Like | Dislike | Share | Posted: Fri, 05/22/2009 - 05:53 | Post subject:

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