Posted on: 02nd Feb, 2008 02:45 pm
Hey everyone. I belong to other forums but this is my first post here. I have been reading a lot on here and have found some very valuable information. I am glad I am a member now.
Unfortunately, we were facing foreclosure last year and when the bank refused to work with us we were lucky enough to sell thru a short sale quickly in Oct '07. The rep at my lender (aka Dr. Doom) was not easy to deal with. My "short sale specialist realtor" turned out to be a real winner becoming "invisible" after we signed with him and he listed my house. He left me to do most of the negotiating with the bank myself. It was interesting. I never did anything like this in my life but it turned out OK in the end. The problem I have now is, during the negotiation, Dr. Doom insisted I sign some type of promissory note for the forgiven amount which is approximately 60k (including realtor fees, etc). I refused and he told me that if I would just sign it and make his job easier, I more than likely would not get a 1099c but could not put it in writing. I still refused. I received my 1098 statement promptly but never received a 1099c. Calling the lender for information is a joke. Nobody seems to know what to tell me about the 1099c. Does anyone know if they are not sending one due to the Mortgage Forgiveness Debt Relief Act of 2007 that was just passed? I want to file my taxes but have been waiting for that.
Any help would be appreciated.
Unfortunately, we were facing foreclosure last year and when the bank refused to work with us we were lucky enough to sell thru a short sale quickly in Oct '07. The rep at my lender (aka Dr. Doom) was not easy to deal with. My "short sale specialist realtor" turned out to be a real winner becoming "invisible" after we signed with him and he listed my house. He left me to do most of the negotiating with the bank myself. It was interesting. I never did anything like this in my life but it turned out OK in the end. The problem I have now is, during the negotiation, Dr. Doom insisted I sign some type of promissory note for the forgiven amount which is approximately 60k (including realtor fees, etc). I refused and he told me that if I would just sign it and make his job easier, I more than likely would not get a 1099c but could not put it in writing. I still refused. I received my 1098 statement promptly but never received a 1099c. Calling the lender for information is a joke. Nobody seems to know what to tell me about the 1099c. Does anyone know if they are not sending one due to the Mortgage Forgiveness Debt Relief Act of 2007 that was just passed? I want to file my taxes but have been waiting for that.
Any help would be appreciated.
Hi girlndebt,
Welcome to the forum.
Are you sure your lender has forgiven your debt?
If lender has forgiven your debt, you would have got a 1099c form. And if the due debt is not forgiven then they may send it to the collection agency.
Best of luck.
Larry
Welcome to the forum.
Are you sure your lender has forgiven your debt?
If lender has forgiven your debt, you would have got a 1099c form. And if the due debt is not forgiven then they may send it to the collection agency.
Best of luck.
Larry
Thanks for the info Larry.
The last time I heard from the lender was October 1st 2007 when they called to make sure the closing was still scheduled for that day. We closed and I have heard nothing. The only thing I have received from them is my 1098 showing interest paid. I call their 800 # and after holding for long periods of time, I am usually connected to someone who has no clue. If they sent it to collections, I should have received something by now right?
Also, they have since updated my credit report to "Settled".
The last time I heard from the lender was October 1st 2007 when they called to make sure the closing was still scheduled for that day. We closed and I have heard nothing. The only thing I have received from them is my 1098 showing interest paid. I call their 800 # and after holding for long periods of time, I am usually connected to someone who has no clue. If they sent it to collections, I should have received something by now right?
Also, they have since updated my credit report to "Settled".
Hi Girlindebt,
Welcome to our forums.
I think the lender didn't send you the form 1099-C because the Mortgage Debt Relief Act does not require one to pay tax on canceled debt (depending upon certain conditions) till 2009. And, you have luckily fallen under the group of people who need not pay the tax, so the lender need not report it to the IRS. Hence you haven't received such a form.
good luck
Welcome to our forums.
I think the lender didn't send you the form 1099-C because the Mortgage Debt Relief Act does not require one to pay tax on canceled debt (depending upon certain conditions) till 2009. And, you have luckily fallen under the group of people who need not pay the tax, so the lender need not report it to the IRS. Hence you haven't received such a form.
good luck
"Does anyone know if they are not sending one due to the Mortgage Forgiveness Debt Relief Act of 2007 that was just passed? I want to file my taxes but have been waiting for that. "
The way I understand it, and of course I could be wrong, is that.... you should still get a 1099. You file that with your taxes and you get a deduction for that amount. I believe the lender is still required to file, if applicable, and you should get a 1099 for the deficiency. I believe they had until Jan. 31 to mail the 1099 so maybe you just haven't gotten it yet. I would keep trying to call them, but still give it time to work through the mail system.
I don't want to worry you, and as I understand it if you don't get it in time for this years tax's you can file it with next years filing.
I think the best advice here would be to call a tax professional and ask them. If you could please come back and post the tax pro's reply to you. It may be helpful for others in your situation.
The way I understand it, and of course I could be wrong, is that.... you should still get a 1099. You file that with your taxes and you get a deduction for that amount. I believe the lender is still required to file, if applicable, and you should get a 1099 for the deficiency. I believe they had until Jan. 31 to mail the 1099 so maybe you just haven't gotten it yet. I would keep trying to call them, but still give it time to work through the mail system.
I don't want to worry you, and as I understand it if you don't get it in time for this years tax's you can file it with next years filing.
I think the best advice here would be to call a tax professional and ask them. If you could please come back and post the tax pro's reply to you. It may be helpful for others in your situation.
well i called the lender again. for being such a huge outfit, they lack customer service skills and had no idea how to answer this question. i was on hold for 67 minutes just to be connected to loss mitigation and held for them some more. you would think with all the foreclosures and short sales going on, they would know how to answer this simple question! did you send me a 1099 or not?
well, the call did not go well and i made the dreaded call to the irs. that was a call i did not want to make. luckily i was able to remain anonymous. per the irs, i need to wait until at least 2/15 before filing my taxes. that is giving time for the 1099 to get here with all the mail delays. i was told there is also a chance i wont be receiving a 1099 at all. the lender may have just "ate" the loss. i don't think this lender will let me off so easily.
thank you so much everyone for the responses. i am seeing an attorney later this month and will ask these questions. if i find out anything that i think would benefit others here...i will definitely post it.
well, the call did not go well and i made the dreaded call to the irs. that was a call i did not want to make. luckily i was able to remain anonymous. per the irs, i need to wait until at least 2/15 before filing my taxes. that is giving time for the 1099 to get here with all the mail delays. i was told there is also a chance i wont be receiving a 1099 at all. the lender may have just "ate" the loss. i don't think this lender will let me off so easily.
thank you so much everyone for the responses. i am seeing an attorney later this month and will ask these questions. if i find out anything that i think would benefit others here...i will definitely post it.
Definitely girlindebt, feel free to let us know about what the attorney says. I've not gone through this but what I understand is perhaps you didn't get the form just because of the new law. But again as you say, who knows this lender may not leave things so easily. But i'm surprised, if they are such a big outfit, can't they just answer a simple question and make things easier for customers.
My florida loan was $170,000, I shortsold for $90,000, leaving "gain" of $60,000 BUT my mortgage insurance company paid 25% of the loan, approx. $40,000. Does that reduce my "gain" to $20,000 on a 1099 for the IRS since the lender did not loose the $40,000?? thank you!
I would suggest you to contact a tax consultant and take his opinion in this regard. He would be able to help you in a better way.
I live in AZ I short sold my main residence and a vacation home.
will the mortgage have to issue me a 1099 C?
will the mortgage have to issue me a 1099 C?
Hi Amelia,
After a short sale, the lender has the rights to come after you in order get recover the dues. In case the lender forgives the deficient balance, then he will issue a 1099c form and you will be liable for paying the taxes for the forgiven debt to the IRS.
Thanks
After a short sale, the lender has the rights to come after you in order get recover the dues. In case the lender forgives the deficient balance, then he will issue a 1099c form and you will be liable for paying the taxes for the forgiven debt to the IRS.
Thanks