Im in the process of a foreclosures is wondering if it goes through what is the likelihood of the lender coming back at me for the tax money? and how much should I expect to have to pay
any help?
I have talked with two people who went through foreclosure and were worried about the tax implications.
In one case the lender got slightly more than was owed on the first, but took a hit on the second.
The borrower got a 1099a at tax time that had no tax liability. The second mortgage that took the loss, never sent them a 1099a so they filed their tax returns.
In the second case, the borrowers got the same form, a 1099a, and it had a liability of only $2500.
I guess you’ll have to wait until tax time and see what your lender sends you.
If you Short Sale the Property I think they forgive the Debt right now because of the shape our economy is in.
I am a Short Sale Investor that deals with the banks on this type of transaction, I pay less than is owed buyt get the Bank to accept it as payment in full so homeowners can have a fresh start.
Official information on the Mortgage Debt Forgiveness Act. Valid through 2012. I am going through the same thing. Best of luck to us both!