Short Sale Judgement

Foreclosures, Short Sales, Tax Foreclosures
1

I am working on a short sale with a seller. The home is a rental that had a fire in 2002. She was unable to continue the payments since there was no income. The mortgage company will not foreclose and insists that she find a buyer. She has offered the house back for 5 years and they refuse to take it back. She has agreed to the short sale but doesn’t want to sign if there will be a judgement against her. She owns her homestead house free and clear and is worried about that the judgement would apply to that house.

She is 61, disabled, and living off social security $3700 per year plus food stamps. Any suggestions would be appreciated. :help

2

Comeback,

Well, I guess it’s a good thing that the mortgage co. will not foreclose because you are her buyer!

When you negotiate with the lender you need to ask them to NOT do a defeciency judgement against the seller. They usually won’t and you can get them to agree with you so your seller will feel more comfortable. If they do this they may send a 1099 to the seller in the amount of the discount…since the seller is in hardship she will not have to pay tax on this by using irs form 982 when tax time comes around.

Go to www.irs.gov and look it up under forms and publications.

Hope this helps.