I wonder how long its going to take. Maybe 2009.

What recourse, if any, are banks likely to take if you simply let your home foreclose. Arent the banks ultimately responsible for paying taxes, association dues, etc once they take the home back ? What percentage in light of the sheer number of foreclosures are even likely to come after the home owner or can they even do that without a judicial foreclosure ? Aren’t people ultimately better off, aside from credit damage, to just let the house go ?

Good question. I think you have to look at 3 things
Will my credit be hit, will I have to pay more taxes, will the lender be able to collect for the balance of the loan and other fees.

Credit - the lineup of damage may go something like this - foreclosure, deed in lieu, short sale. This is not my legal opinion, only my Realtor opinion, for which I hope you can’t sue me.

Taxes - I feel more comfortable, here, giving my legal opinion, but we have a new law as Bob Wilson pointed out above.
All I can say is watch out for Capital Gains. Particularly if you pulled money out on a refi - Make sure you have a lawyer go over the law with you and an accountant to go over your numbers. As far loan forgiveness taxes on a refi (principle residence) - the language above makes it look like you would be in the clear. But, I prefer to see the exact text of the law and how the IRS and the courts interpret it.

By the way (via email) Bob brought up a good point - how will foreclosure costs and legal fees be calculated.

Deficiency - I will briefly address the issue of a deficiency. This is general stuff, and there are exceptions to the rules. You must seek legal advice from a lawyer who has thought about this stuff - especially if you are still current on your loans. And before you think anyone can do this - I I ask you - what will happen if you do not find a buyer or your lender rejects your short sale. What will you do when you get a Notice of Default, When will it be too late to seek alternative solutions? What will you do if your second is a sold out junior?

Professionals Realtors like Bob probably know the answers - but, they understand you will be better served if you work with a team who is licensed to give you answers and sell your property….

Purchase money loans -

If you have purchase money loans - in general you should not do a short sale unless you have a short sale listing addendum, a short sale purchase and sale addendum. You also need to insert clauses which are designed to protect you in case the lender agrees to the short sale offer from the buyer. Without certain clauses you could be screwed out of hundreds of thousands of dollars - depending on the deficiency. Do not sign a short sale offer unless you know what you are doing.

Remember there are alternatives to a short sale. And in many cases a foreclosure is preferable to a short sale if you have purchase money loans.

If you have recourse loans - don’t even think about doing short sale until you have a workout plan in place. Lenders with recourse loans have been seeking to collect on the balance owed - whether you do a short sale or not. A short sale may actually compromise your financial position.

Sellers have a great protection under California law. But, you have to know how to protect your rights. If you do it wrong you could be out of your house, with bad credit and a very large bill for a deficiency.

Ron,

John is a real estate attorney licensed to practice in Florida and California. Since your question goes beyond my expertise, I asked him to chime in here.

is it ever possible to buy a home after you have done a short sell if so about how long after the sell if no more neg. credit and why don’t the gov have something to help these people get new smaller morgages. after all the goverment did help us get in this perdicament with ecomomy falling

WE are currently selling our home short-sale instead of going foreclosure. If I am understanding the new law correctly then we will not be responsible for the difference (taxes) Currently the 60,000 difference between what is owed and what we sold it for we would be taxed on as income. That has changed in the new law?

delt - It is possible to buy after you have done a short sale. The loan terms will be based on your credit score.

The short sale by definition is charge off of debt. That alone will be a negative hit to the credit score. 30, 60 and 90 days lates each lower the score. If an NOD is filed, the FICO score takes another hit. Every short sale is different, as is the time to repair the credit damage.

The government did do something to help. They passed the law which lessens the financial impact.

Tammy - the answer depends on whether the forgiven debt qualifies as acquisition debt.

It’s defined here:

Section 163(h)(3)(B)
(B) Acquisition indebtedness
(i) In general
The term ”acquisition indebtedness” means any indebtedness which -
(I) is incurred in acquiring, constructing, or substantially improving any qualified residence of the taxpayer, and
(II) is secured by such residence.
Such term also includes any indebtedness secured by such residence resulting from the refinancing of indebtedness meeting the requirements of the preceding sentence (or this sentence); but only to the extent the amount of the indebtedness resulting from such refinancing does not exceed the amount of the refinanced indebtedness.

Text of bill (I finally found it on this website above) says it only applies to discharges of indebtedness since Jan 1 2007, so no retroactive effect.–Walker

Does the Mortgage Forgiveness Debt Relief apply to land investment? The tax on the difference after the short sell on land can be forgiven?

I just received a 1099 A from OCWEN loan servicing. They foreclsoed on me in Nov 2007. The difference between the FMV and the amount of the 1st note is the exact amount owed to them on a 2nd note. Am I responsible for the difference of 79K? I can not afford an attorney or fancy CPA. I have a huge amount of medical bills from my cancer treatments. My husband just found a job as he was working as a realtor. Any ideas will help.

Kristy, it only applies to a primary residence.

Debbie, can I contact you at the email you entered?

added: Another option may be insolvency.

I had a $150,000 home equity line of credit ( no mortgage) on my 1915 Minnesota home which I used mainly for home remodeling, building a barn and buying a car . In July of 2007 I financed with Wells Fargo, getting a 30 yr fixed rate mortgage, paying off the home equity and getting enough cash to pay off some credit cards. House appraised for $210,000 in August. Mortgage is 177,000.

Lost my job in October. Could not find a job that paid any where near what I had been making and accepted one out of state. I put my house up for sale and moved to Colorado in December. House is not selling, haven’t made a payment since November and won’t be making one in February.
Still making considerably less than before, but Colorado rent is less than half of my old mortgage payment, so I am staying here permanently. Since I had a cash out “refinance”, vacated (but not abandoned) my Minnesota home does this new legislation help me if I short sell it or bank forecloses?? My realtor is pushing short sale, I am not so sure. I have heard I can also “give” the house back to the bank if I am atleast 3 months behind on my payments.

Darla, giving the house back is called a deed in lieu of foreclosure. It cuts out the lender’s need for any foreclosure proceedings.

Refi debt that goes into substantial improvements of the property qualifies.

If the lender has recourse, they can seek a deficiency. With a short sale, they can still seek a deficiency. If you can get them to forgive the debt, you will get a 1099C from the lender. If you are liable for the tax, then you have to weigh the lesser of two evils - owe the IRS or owe the lender. The tax would be the smaller amount.

The other option is insolvency - where the IRS agrees that your debts outweigh your assets. You need a CPA or tax attorney for this.

Should I still pay for the difference under this Mortgage Debt Forgiveness Act if I will result to short sale? I’m worried because the new law doesn’t clearly say that the differenceof the amount I owe and amount resulted from short sale be written of by the lender.How can I be assured that I wil not pay for the difference if they found me I bought a new house right after short sale took place?

Cris, whether or not the the difference is written off by the lender is up to the lender. That is something that has to be negotiated as part of the short sale. Once the short sale closes, there is not much you can do.

My condo dropped in value and I can not refi after my ARM kicked in last July. The service group that has my 1st and 2nd has been draging me along on the modification and now I am 60 days late. My question is. Does the Mortgage Debt Forgiveness Act forgive the difference of a short sell of the condo and the difference of what i owe on the mortgage or just what the IRS can tax me on that difference?

Joe,

The lender has to forgive the debt. The law has to do with the tax on the forgiven debt which is treated as income by the IRS.

Any help insight would be greatly appreciated.
I bought a home in October 2006. I got a jumbo loan with a 30 year fixed interest only for 5 years. I have not had any late payments yet. I am watching my house value diminish daily and don’t know how to handle the situation. Do I get out now?

I heard of the Foregiveness Act and don’t know if I am a candidate for it.

Hi. My name is Alex and i have a question.In 2003we bought a house with adjustable rate morgage for 5 years ARM with
4% and %20 downpayment. On July 2008 our loan will be expired and we have to pay higher monthly payments if do not refinance our loan again. I have heard that President Bush allowed homeowners with ARMs to extend their ARMs with morgage companies. Is that true? What can we do to avoid foreclosure? In our situations we will not afford to pay high monthly payments. Please give us advise what should we do. Thank you very much. Alex

Brie, can you afford to stay in the property and do you want to stay? Many people, including myself, are seeing our equity drop, but will ride out the storm. If you planned on living in the home for a long time, the market will come back. If you only intended to stay in the property for a short period of time, then selling now before it drops further should be considered.

If you are worried about the interest rate, you should call the lender to see what options they offer you. Rates are down again, so refinancing may be a viable option.

Let me know what you decide to do.

Alex, the President’s plan was more of a suggestion than anything else. Your first step is to call the lender and see what they are willing to do in terms of a loan modification. If they won’t do anything, then tell them to send you a short sale package.

If you are current on your mortgage, then the loan modification would be in the best interests of you and the lender. If you decide to go the short sale route, then let me know and I’ll get you in touch with someone in your area who knows what they are doing.

Thank you Bob. I planned on staying in this house for about 5 years thinking I would gain some equity to put into a new home out of state. I don’t know what makes sense. At this point we can afford the payments on a very strict budget. My payments won’t go up for 4 more years when i start paying on principal. We bought the home for $425 and probably can’t sell it for more than $350. My mother keeps telling me to cut my losses and deal with the credit score hit and the tax implications and let them foreclose on me…it just seems to easy to bail out. There must be more serious implications. If there is some mortgage forgiveness act out there, who qualifies? People with an adjustable interest rate? Or someone like me.

Our house in California was foreclosed in 2007.I recently got a 1099C from the second mortgage company with a debt of 183,000 a box6 checked for bankrupcy which we have not done and a fair market value left blank? What does it mean?

Hi my name is Charity and I have a question that I have not found a straight answer to. In Nov. 2007 I signed my home of six years home back to the bank. I was divorced with three children and could not keep up with the payments. I live in the Michigan and the value of homes has dropped so drastically that I could sell it for what I owed or even do a short sale. My question is what are the tax implication for the cancelled debt of the deed-in-lieu forclourser? I remarried Dec. 2007 and we will be filing jointly. My guestion is will I be exempt for any reason on paying taxes on the cancell debt, because of the capital gains tax, the mortage forgiveness act or that I was insolvent?

I was foreclosed upon in May of 2007, and I just recieved a 1099-A from Countrywide. I am not quite sure how to determine how much debt the IRS is going to be treating as income. I took part in an investment through a questionable realtor who is no where to be found now, and now I am facing the probability of loosing my tax return, and possibly having my wages garnished. The realtor assured me that the house was going to be rented out and that his firm would be paying the mortgages on the property. Obviously this never happened. I am more concerned about getting out of this mess with the IRS than I am about any retribution (as I will explore that later), but is there any way to appeal to the IRS as I debt (especially as a result of this 1099-A) far outweighes my assetts?

Brie - it sounds like you would be a candidate for the tax relief on the mortgage forgiveness if he lender is willing to forgive the debt. Their would be a credit hit, but it won’t have the same long term impact of a foreclosure.

Sean, I don’t know. I’ll see what I can find out.

Charity, you need a CPA or tax attorney to answer that question.

VWK, you also need a good tax attorney for this one. I hope you get your man though, and the agent gets his just rewards.

Bob- I bought a house in San Diego in 2004 with a 5yr ARM that will end Sept of 2009. I am current on all my payments but am concerned about the drop in prices. I am considering selling this house but am also hoping that the prices rebound by summer of 2009. Would it be better to wait till then? I know there is a glut of inventory, especially from REO and shorts, which right now seems to be pulling prices further down. I figure, if the glut gets smaller this year due to sales, perhaps prices will improve next year. What do you think?

On January 31st..my home foreclosed. This is the actuall date given on my 1099a form. The first was paid back but the second was not. My ex and I owed still $60,000 to the second but of course never made any more payments on it because we were no longer living there. Until I heard about the new Debt Forgiveness Law of 2007, I figured I would have to pay taxes on it. Now I understand I am covered. It was under one million, it was our primary residence, and it happened in 2007. Based on these conditions, is that debt forgiven? I have heard about recourse and non-recourse loans potentially factoring into this. Does any of that matter. If someone has an answer, that would be great. Thank you.

Beth, I honestly do not believe that prices will be higher in 2009 than today. That would require the drop in prices to stop, which isn’t happening, then urn the other direction. Nothing points to either of those two events happening at the moment. The increase in REO sales is only creating lower comps for later sales.

It could stabilize later this year, but how much in value will you have lost in the meantime? If I’m selling, I’m cutting my losses now. If I’m buying, it’s for the long term.

The new law doesn’t forgive debt, only provides for no taxation in those situations that qualify.

It is up to the lender to forgive the debt. If the lender has recourse, then until it’s forgiven, they can pursue repayment. There is no potential tax in that case. If your 2nd hasnt forgiven the debt, then no tax yet. At some point if they decide they can’t collect and write it off, then the law could come into effect.

One question that remains is what happens if the 2nd doesn’t forgive the debt for 4-5 years outside the timeframes provided in the new law?

We are in California. Our home foreclosed in December 2007. We had one of those “neg amortization” loans through Countrywide We had a 1st and a 2nd. Anyways, today I recieved a 1099-A for the 2nd which indicated in box 5 that “Yes, I was personally liable for repayment of the debt”. I have 84,000 outstanding on my 2nd and in box4 is states that the fair market value of property was “$420,000″. The 1099-A I recieved for our 1st says that in box2 there is an outstanding amount of “$416,834″ and in box 4 is says the fair maket value is “458,179″ which is more than I owed on the 1st….
I am confused, afraid and can’t afford to pay a tax person or attorney for advice. Help!

April, where are you in CA? There are plenty of places that offer free or discounted tax assistance. Enter those terms into a Google search.
Good luck, I understand that it is a daunting process that never seems to end.

April, I’ll see what I can find for you.

Once we file a deed in lieu of foreclosure, what is the average amount of time we can still stay in the house? Any ideas or suggestions would be greatly helpful - thank you

We purchased our home in September 2005 for $300,000, which was unfortunately during the height of the market in the Southern AZ area. The comps have since dropped dramatically. A home a few doors down, same model, is listed at $190,000. We do not have a subprime loan, we have a VA loan (30-year fixed rate at 5.5%). We are current on all of our payments, but are on a fairly strict budget. With every other utility and gas prices continuing to rise, it is harder and harder to meet the demands, but we are doing it! It makes us sick to our stomachs to think of how much we are paying each month and to see teh value of our home decreasing constantly. Is the loan forgiveness something right for us and how long does it affect your credit score as we have excellent credit. Don’t necessarily want a black mark but don’t want a $290,000 debt hanging over my head when the true value is somewhere near $200,000. Please advise!!!

Ken, the lender has to agree to the deed in lieu. How long you stay depends on how long the process takes with the lender and once they agree, what ever you can negotiate with them.

Bob

I am clueless about this whole thing. Here’s my situtation. We bought our house in April of 2006 in Colorado. Both my husband and I got raises from our jobs at that point and then when we had our baby in June, she was premie and we were in the hospital a total of 21 days. Huge medical bill that we did not expect. We have been behind on most of our bills for awhile and our credit score is shot. We are currently behind 2 months on our mortgage. Does this Mortgage Forgiveness Debt Relief allow us to ask our Lender (Countrywide) to help us out in getting caught up or possibly lowering our monthly payment ($1720) for a certain period of time? Or just renegociating our loan w/o all the fees of refinancing? If so, what is the correct terminology to use with our Lender? We plan of staying in our house for a long time. We owe $224,000.

Cassie, you need to call customer service at CW and ask for a loan modification package. Let me know how things progress via email.

Hope your little girl is doing well.

Laurie, contact Del Sutton.
(520) 622-HOME (4663)
del@masterconsultants.net

we made a misstake and refinc. with amerquest in 2006, we didn’t know that after 24 months are payments would have double 14 months later we found out. We again had to refinc with major penlities. now four months later my wife lost her job an now can only find a part time job, as a result we can’t make are payments we called the lender,they told us to pay half one month an half the next along with our normal payments,how can we when we can’t make the normal payments. we need help to get out from underneath tis loan short sale or give back??

James, what state are you in?

Can anybody explain this to me?

Any debt secured by your principal residence
that you use to refinance qualified principal residence
indebtedness is treated as qualified principal residence
indebtedness, but only up to the amount of the old mortgage
principal just before the refinancing. Any additional debt you
incurred to substantially improve your principal residence is
also treated as qualified principal residence indebtedness

we had refied in 2006, from 110k to 145K what happens to the 35K? House was “worth” 120K. did deed-n-lieu so the 1099 shows loan as 145k and house worth 120K so we have tax on 25K. Am I going to fall into a loophole here? Or is insolvent the way to go?

If any of the $35k you pulled out went toward improving the property, then that amount is covered under the new law. beyond that, you need to speak with a CPA or tax attorney.

fla

bob regarding 2-14-08 fla

I purchased a condo on Feb 2007 $205,000. and now it’s barely worth $130-140,000. I can’t afford the payments anymore and wanted to see about doing a short sale.
I haven’t missed a payment but I was thinking of not paying from now on until the condo sells if it sells.

Can my wages be carnished for the difference if they don’t forgive the loan?

I purchased a condo in Florida on Aug 2006 $222,000. and now it’s barely worth $140-160,000. i have a half owner who lives in wisconsin ,we see it droping fast and wanted to see about doing a short sale.
I haven’t missed a payment and we have a tennet ,the developer /management (vista)of the condos went bottoms up and it is in limbo until the bank takes over from them ,What are the tax impacts and credit impacts,can they put a lien on our homes
Can my wages be carnished for the difference if they don’t forgive the loan? thanks for the help

We purchased our home Aug 2004 for 310k then refied in Jan 2006 for 364k. Due to circumstances we did a short sale in Dec 2007 for 335k. I got a 1099 for the 70k diffrence. It says the debt was canceled. It also states FMV is $0. Will we have to claim the 70k that was forgiven as income? I’m not sure about the whole refi clause. The majority of the refi was used for improvements.

Hi Bob,

we purchased our house in St. petersburg, Fl in July 2004 as primary residence. May of last year, we relocated to Aliso Viejo, CA because of my husband’s job. We have a renter but his lease is up in 2 months . Since we bought a house here in CA last December , we can no longer sustain 2 mortgages because i am going on maternity leave in 2 months and our income is not enough to cover the difference. We want to short sale the property in Florida and have spoken to 3 realtors, 2 of whom have short sale experience but has not returned my call since. The only realtor who wants to list my house on short sale has no experience but has a collegue that can help her. Im not very confident knowing that theres going to be a lot of negotiations involve and i feel like im doing a lot of leg work for her. She doesnt even know what a completed HUD1 requirement from the lender and wants me to ask the lender. Do you know anyone in Tampa, clearwater, St. Pete are who specializes in short sale?

Also, we took out 70k for HELOC with BA, first is american home. We used the money to pay off credit card debts. DO we qualify for the loan forgiveness act? The house is 330k and the last comp sold was 247k.

Thanks a lot

I don’t know anyone in that area, but Glenn Ginsburg is a broker in the Naples area (click on his name to go to his website).. He may be able to refer you to someone. More importantly, he should be able to give you the names of some attorneys and tax experts. Start with the legal and tax guys BEFORE you hire an agent, especially in a recourse state like Florida.

The 70k HELOC wouldn’t qualify, but a tax pro could tell you if you have other options available.

Kelli, I don’t know how one deals with refi debt used for improvements on a tax return. That is a question for the tax guy.

Nate, same advice - talk to an attorney who is well versed in Florida real estate law.

Lisa, the lender can seek a deficiency judgment if they don’t forgive the debt or agree to not do so as terms of your short sale agreement if it isn’t a purchase money loan in California.

What I’m wondering is if I’m going to be able to refinance my home loan at a lower rate even if it doesn’t appraise at the price I need the mortgage for? Not that I’m not willing to pay the price I bid for the home. I just want a lower interest rate.
I had claimed bankruptcy 2 1/2 years ago (8-05) when my exhusband and I divorced. Neither of us could afford the house by ourselves, so we had to let it go. My mortgage broker, at the time, told me to come back to have him refinance the mortgage after my bankruptcy was a year old (8-06). Well, I called and got no reply. So I went to another guy. He said, “Let’s wait until after your bankruptcy is two years old and then you’ll get a better rate.” Not really what I wanted to hear.
When the time came, he looked over my paperwork and informed me there was a 2 year prepayment penalty fee of $8,500.00. So it really wouldn’t benefit me to refinance at that time. I would have to wait yet another 8 months (4-08).
Now the time has come. This Monday, I am to meet with the mortgage guy. I am not late on my payments. My credit score is right around 700. But if I’d known I’d be paying this house payment ($1,863.00) a month for 2 years, I would’ve never bought the house. I was only led to believe I’d be able to refinance with No problems after only 4 months of this payment by my original mortgage broker…My bad.
What I want to know is if there are any plans for me in this situation. I only want a lower interest rate on what I owe already. My payments are scheduled to go up $350.00 a month in April. I can barely afford the payment I make now. I sometimes wonder how I do it myself. I don’t want to refinance at what my interest is now. I want a lower interest rate along with a lowered payment.
If I can’t get refinanced by another company, I’m planning on going back to the company I have my mortgage through now. I’m going to tell them I cannot afford the increase and I want them to refinance me at a lower rate. They will still be getting the money owed. They will just not be making as much off me as they were.
If they can’t help me, I will have to walk away. This past year, only $500.00 went towards the principal, so it’s not like they haven’t made any money off me. I know that’s what they are in business for, but like I said, if I’d known I’d be making this payment for 24 months instead of 4, I would’ve never signed the papers. I’m only thankful I do make decent money. But my goals are not to work only to get by.
So, are there any recent laws signed into effect that will help me in my situation? ARM that is about to go up; current on payments? I thought I heard something about that. But I could be wrong. I’ve been working too much to pay attention! lol Thanks for reading and letting me vent.

Quick question I haven’t seen addressed yet (but, please forgive any oversights or redundancy on my part)…

Can you please clarify the difference between a 1099A and 1099C. As I understand it, the ‘A’ already received following a Dec ‘07 foreclosure is reporting acquisition of the property by the bank, which should then be treated on taxes as normal for the sale of a home (?); and if REO is subsequently sold for less than what was owed on the ‘A’, a ‘C’ may would be issued at that time? Is this correct.

Lastly, both the first and second lienholder issued 1099A for different FMV’s. Why would the second issue a 1099A if they are not the ones to acquire the property through a foreclosure.

Much appreciation for any assistance with this question. Thanx

Maureen - if the property doesn’t appraise, your chances of refinancing or slim. If it were me I would go to the current lender and ask for a loan modification package. There are no current laws that require the lender to do this though.

Van - The following IRS publication is the most complete resource I have found:
http://www.irs.gov/instructions/i1099ac/ar02.html#d0e124

Hi, my name is Christine. Not too long ago I put my primary residence and my rental property for short sale. I just realize that I will be paying taxes on the difference on my rental property and I cannot not qualify for deed in lieu of foreclosure for that property as well since it was purchased for investment only. My question is, is there any way to avoid bankrupts and not being hit to pay taxes on the difference on my rental property when I have a purchaser.

Christine, insolvency may be an option.

What do you mean by that. Also I forgot to tell you that I leave in Florida.

I owe 60 grand in taxes because I had to include the 1099a income for my rental property that I lost due to foreclosure. I make 32K a year and have no way to pay this balance nor to I have any assets. I was in the mortgage business and loss my job where I amde pretty decent money at all. I also lost my primary residence and filed for chapter 7 bk. I have no idea what to do. I am so scared right now. The government has got to do something. I am not the only one who is going to be dealing with this . If anyone has any insight to give, please do. I am in and out out of the hospital and having i am getting ready to have my third surgery. My debt will probably outlive me. I am so sick behind all of this. Someone help me please…

I applied for a deed in liue on Aug 2007, the bank rep. told me in december the deed in liue had been approved, but so far we have not heard from the bank…Can the bank just come one day and ask us to move out, one day to another???

We have an adjustable rate that was due to change in January. We called our mortgage company and told them we would not be able to afford the new rate (10.5%) and our house had lost so much equity and we lost a portion of our income that we were not in a position to refi. So they have re-worked our loan to a 6.06% rate and gave us a new principal balance of 366,000 from 487,000. Does the portion that they forgave (121,000) qualifty under the Debt Forgiveness Act? Is the Debt Forgivness Act in place yet? Any info is appreiciated.

I lost my home to foreclouse, I ask Countrywide for a loan mofication, to reduce put what I owe at the end of the loan and extended to 40 years, the my real estate agency had a short sale i process Countrywide denied. Countrywide did not want to reduce the price of the home, it was not worth what their appraiser stated, there about $100,000 worth of good work to be done on the home, I live here for 13 and half year, I don’t want to leave my home. I think the forgiveness loan is only for certain people.

I think a homeowner should know approximately how big a nut he or she has to come up with on a monthly basis.On the same token it all ties in with [CREDIT] which we all know is a bunch of CRAP!!! BANKS ARE BANKS,What F___en amazeses me is, how the big guys pay the smaller percentage of taxes and larger income people dont.IF YOU PEOPLE REALLY WANNA SEE AND HEAR ABOUT THE FUCKEN SHITHEAD THIEVES IN GOVERNMENT???? LOOK UP theguyfromboston and listen to the 535 employee skit /// IT WILL BLOW YOUR MIND.!!!///!! AND IF YOU TRULY BELIEVE THAT YOUR VOTE REALLY MATTERS ,YOU:VE OBVIOUSLY BUMPED YOUR KNOGGEN.

Can one of you VA home loan experts answer this one….

I had a VA forclosure on a home about 10 years ago due to some bimbo with 3 kids that sucked me completely dry after a long 12 month marriage. The Judge , a backwoods TN hick, decided that she should get the home despite the fact that she didnt have a job or any source of income to pay for it. I believe he must have been banging her on the side. What other reason for such a brilliant decision? Needless to say, the the home was predictably forclosed upon a few months later due to non-payment!!
I contacted the VA a few years ago and they informed me that the bal owed to them from the sale was 27,000. I was told that I could not get another VA loan unless this debt was paid in full. Recently, a Realtor ran some sort of online VA loan approval to see if I was eligible. The result was I passed and the Realtor told me we could go VA up to 417,000 despite what I told her about my past.
Does anyone know if I am in for a BIG dissapointment or does that 27,000 eventually drop off the VA system?

PLEASE HELP!!!

Thanks

Jeff

Jeff, I would call your local VA office, but I would expect that they will tell you that you still owe the $27K and ineligible until its paid off. That said, the VA isn’t the most efficient operation around, so they could screw up in your favor.

I have my home on the market for a short sale. If the bank accepts the offer of a short sale, will I be responsible for the difference. If I sell the house for $250,000 and I pay off of mortgage is $369,000. Do I have to report that as income and pay taxes on it, Or does the Debt Relief Act appy in this case.
Help!

I am working with Chase Bank and a wonderful realtor in Lodi Calif. My situation/question is as follows..I got stuck in a neg amr. loan that had a 3 year pre-payment penalty so i couldn’t sell when I forsaw the market a year ago..I contacted the bank and they would not let me out of the agreement so i could try and sell my property before the market crashed any more. I took out 2 seperate loans with Chase a month apart initially .I took some equqity out of my primary to buy the second property as an investment to help pay for kids in college…I am in forclosure now(past 90 days on both) and my realtor is working on a short-sale..My question is will I be forgiven by IRS on both properties if I choose to forclose because they canot sell or should I chance working with the bank on a short -sale? Because I re-fied and got a second loan with the same bank, I hoping if I forclose I will be eligible for the forgiveness act..Thank’s..Donna

Karen, if the bank agrees to forgive the debt, then you will receive a 1099. if the debt forgiven is acquisition debt, then you shouldn’t have to worry about the Fed tax hit. Make sure you get legal advice on the terms of the short sale approval.

Donna, the debt forgiveness only applies to a primary residence.

Bob, thank you for taking the time to answer all these concerns. Just wanted to update my situation. My house appraised for what I bought it for (good for me.) I did roll my closing costs into my initial mortgage, so I’ll have to come up with the closing costs, a year’s taxes and insurance (mine were separate initially), closing costs and about 3% of the value of the house so I can refinance FHA. Luckily I have a 403B to borrow from for this. I do make decent money, so it will be nice to have some of to keep in my pocket from now on. Thank you again for your time. Have a great summer!

Hi - Wondering if my situation falls under this law. I refinanced in June w/ a fixed rate satisfied w/ the outcome of the refi. A couple of months later we get a call from the lender telling us that they are not able to sell our loan to anyone so they would like to give us a offer.They would be losing money if they were to sit on our loan, so they wanted to do everything possible to sell it to someone else. So that meant making a deal w/ us and refinancing. If we refi, the payments are less, longer fixed rate, lower apr, no pre-payment penalties, they would pay closing cost, etc. etc.etc. We would definitely be benefiting from this refi. There was no lose on our end in anyway. The only negative thing that came from this was that they would eat $63,000 of the loan, but we would have to claim it as income. I say the “ONLY” negative thing, but I’m still not sure if this was a wise decesion. It seems to be in the long run, but now that I had to do taxes, it doesn’t seem to good. I wanted to know if the law applies to my situation. Please advise.

Thanks
Debbie

I live in Florida and as I read the law even if the Bank was to come after me for the deficiency and try to garnish my wages, all I would need to do is go to court and show the judge I am head of household and there will be no way for the bank to garnish my wages unless I agreed to the garnishment and I would never do that and I have no other asetts for them to go after.

Bob,

I need some advice to figure out my options on my house? I want to know more about non-recourse vs. recourse loans 80/20 no refi and what the bank can come after, taxes, etc, I live in LV, Nevada. Could you refer me to someone who has expertise in these fields? Thanks in advance!!

Joseph

Bob, my husband and I have our house on the market right now for a short sale. The diffence between what is owed and what it will sell for will be approx $165,000. We had filed BK that went through Jan 06 the mortgages were included in this. Does this change our tax relief in any way? Or would we still need to purchase again within 3yrs in order to not owe tax? Or am I miss understanding the tax relief? This is our principal residence for last 10 years. Thanks

Is Your Lender A Patriot or a Terorist? Check this very interesting article out.!!
http://reno.broowaha.com/article.php?id=3462

I need your help. I’m a homeowner in MA. I’ve never missed a mortgage payment. 2 years ago I refinanced on an adjustable rate mortgage. Since last November, I’ve been trying to get out of this knowing that the market was crashing. I couldn’t due to the home value suddenly becoming less than what I owe. I’ve tried 3 times with lenders. My credit is great but my home lost its value. Once it was worth 286k, now its worth 215k. I owe 236k. My mortgage just went up for the next payment May 1st. I’ve contacted my mortgage company back in Dec 07, they told me that I couldnt appeal it for modifaction until March 11th. I contacted them on March 11th and went through the process. No one has contacted me yet, I’ve called many times, all they say is that someone will get to it soon. What should I do? My payment went up $450.00 per month. I’m crushed….I’m a single father and don’t know where to turn. Thank you in advance for your advise…Robert B.

I’m sorry if this has been answered already. I have a home in Las Vegas with a 85/15 mortgage - two different lenders. I have spoken to both of them many times about my options as my rate on the 1st is set to adjust and I will not be able to afford the new payment. The lender on the first seems willing at this point to forgive my debt if I go into foreclosre. Since the value of my home is now just about the same as I owe on the first, I’m pretty sure the 2nd lien holder will not forgive that debt. Will the federal tax debt relief apply to both my first and second, or does the lender have to forgive the debt in order to qualify for the benefits of this legislation? I have never re-fied the property.

I had my bankruptcy released late last year and agreed a loan modification with my mortgage lenders (1st and 2nd loan purchase money). I intended to make the payments and have just made 2 payments since the modification. However, increasing cost of living (gas, food and other basic living necessities) combined with decreasing income from my business put me back in a financial challenge. What would happen if I stop making payments on the 2nd loan but try to meet the first loan? Both loans were included in the bankruptcy last year.

Any suggestion is appreciated.

Roger

Hi I live in the state of Arizona and my husband was laid off and I took a pay cut. I owe 280,000 on my home and you can buy brand new in the City of Maricopa for 165,000. I have talked to a CPA and my realtor about a short sale. My realtor wants to list my home for 130,000 and drop the price by 10% every two weeks. My CPA and realtor have told me about the law Bush had sign, but still confused with all the articles I’m reading. If my lender agrees with the short sale am I gonna have to pay taxes on the difference? I believe about the Capital Gains if you move more than 50 miles of your home you don’t have to worry about Capital Gains is that true? I want to move back to Chandler, that is where my work is and my schooling. Please HELP me with the 1099 issue I’m sooooo confused. Thanks MOnica

EN EL ANO DE 2005 COMPRO 3 UNIDADES EN CALIFORNIA, MI PRESTAMO SE ME HISO VARIABLE, SUBIENDO MI PAGO $800.00 MAS, AHORA ESTOY PAGANDO $1950 MAS PUES CUNADO COMPRE LAS 3 UNIDADES ESTABA NEGATIVO 1,150.00 X MO. AHORA NO GANO LO SUFICIENTE PUES TRABAJO PARA LA CONSTRUCCION Y AHORA ME HAN DESCANSADO, Y ESTOY TRABAJANDO EVENTUALMETE CUANDO ME LLAMAN, ESTOY EN UNA SITUACION DESESPERANTE, QUE PASA HAGO UN SHORT SALE YA QUE ESTA PROPIEDAD NO ES MI RECIDENCIA PRINCIPAL PUES TENGO UNA CASITA QUE LA COMPRE EN 1997 EN LA CUAL AHORA VIVO CON MI FAMILIA, EN LAS 3 UNIDADES ENTRE CON UN 10% DE DOWN /PAYMENT ME COSTARON 475.000 AHORA EL VALOR DE ELLAS ESTA POR 275.000 COMO COMPRENDERAN NO PUEDO REFINANCIAR, QUIERO SABER SI AL RECIBIR LA 1099 TENGO QUE PAGAR AL IRS SOBRE LA PERDIDA DEL BANK

GRACIAS

JESUS PONCE
lucero92571@yahoo.com

My husband and I are like many millions of American being affected by the home industry. We bought our house two years ago; with an 80-20 loan. For the first two years we had a fixed interest rate but on August 2008 our interest will become variable. We are forced to refinance. But we cannot do so because no company will take a home that is worth less (-$50,000) than what it was purchased for. We have contacted Littonloan Servicing- our mortgage company regarding this issue and all they offered us was a 5 year fixed rate with monthly payments of $1,500 which is the same amount that we are paying now. We have never been late with any of our monthly payments and know we qualify for the Mortgage Forgiveness Debt Relief Act of 2007, but they are just giving us the run around. We have left many messages on their answering machine-they never answer their phone or return our call, we have also written email messages and what they do is respond the same thing 5 years fixed rate with the same monthly payments. Do you have any suggestions on what we should do?

Many thanks,

Cynthia

somone i know recently retired. took a large buyout and insentive to retire. they decided they dident want to pay their morgage even though they have the money and want to let thehouse forclose. can they do that with the new morgage forgivness law

I purchased a home in Michigan in Nov 2004 on an ARM loan for $237,000 . In May 2006 I had to relocate to another state for a new job. We moved to that state and I rented out the home. In Nov 2007 I lost my tenants and my ARM adjusted. I was not able to get another teanant or sell it and my home has foreclosed. The bank bought it back for $144,000 and I have a 12 month redemption period. I just got an offer for $177,000 which is enough to pay off the redemption amount plus the second and commisions. Can the lender come after me for the difference between the original loan and the redemotion amount?

Three years ago we refinanced our mortgage. The balance is currently 504K. The original loan amount was for 370K.
This is the primary residence for the last 5 years? If the home goes into foreclosure my understanding is the original puchase loan of 370k will not be considered taxable income,however, the 170 may be. Do you know if the 170 can be discharged as capital gain under the Capital Gains Exemption of 250k for homeowners who lived in their home for 2 of the last 5 years? Or is insolvency they way to approach this situation? And is insolvency different than bankruptcy?

Call me cold hearted, but I’m not happy about the sympathy that leads to government action on behalf of greedy or overextended mortgage “victims” who had no business striking the deals they put their names on.

No one had a gun to their head with these sham deals, and I’ll bet my mortgage that all these folks knew deep down they were indulging a huge risk in trying to game the system in their own favor. Well, the music stopped, everyone scrambled for a seat and our real estate musical chairs left many gamblers without a place to sit. And now we have to bail them out?

My husband and I have an ARM mortgate that is set to adjust in October or November. My husband just lost his job in June ($3500 per month pay cut) and is on unemployment and cannot find a job. We cannot afford our mortgage much less an increase. We are not 30 days late on any payment What are our options and what would be the best thing for us to do?

Hello. I am directing this question to “Bob” since he appears to have the answers for our situation. If someone else wishes to answer….please do! My daughter is in default on her home mortgage. After many disappointing calls to the lender, I believe she feels it would be best to let them have the house. Short sale is apparently not an option, since they are not selling either. She, unfortunately, also has a home equity loan ($76,000). Here are my questions:
1. If she walks away from the home, is it true that she will NOT have any tax liability (IRS) since this is her primary residence?
2. If she stops making her HELOC payments (interest only), can the bank garnish her wages?
Thanks so much.

My brother purchased a house in 2005 during the height of the market with an ARM (interest rate 6.7% and margin4.75%). They are paying $2000 a month which is not sufficient to cover the interest due and the difference is added to the loan amount and it is charged interest on it. They purchased the house for $435000, paid 35.000 down payments, and got a loan for $400.000. Now after 3 years the house is worth 40% less than the original price and the loan went up due to ARM option type of loan, their balance being now $455.000. The contract for borrowing money is signed by the daughter (25 years old) and my sister in law for some reasons that just the loan officer knows about and I didn’t understand. He told them to do that. Now the daughter is bound by that contract. She doesn’t live with them. She has excellent credit. Their parents didn’t miss any payment and have very good credit too. They cannot refinance because the value of the house went down so much.
Please advise what they can do to avoid foreclosure and what the daughter can do to get out of the contract?
Thank you.
Sincerely. Angela

If I am facing foreclosure and my house is only worth enough to pay the first mortgage at auction,can the second mortgage company come after me for the debt?
What is different between Form 1099A and 1099C?

Thank you for your help in advance!

Do I still need to pay the the property taxes if my house is being foreclosure? Thank you!

I HAVE A HOUSE IN NEW YORK BUT I HAVE TO SALE IT AT SHORT SALE THE BILLS ARE TO HIGH AND THE PAYMENT IS TO HIGH THE RATE IS 13 % AND 8% I HAVE TO LOAN BIG ONE AND A SMALL ONE FOR 5000 I AM GOING CRAZY MYCC CARDS ARE MAX I DONT WANT TO FORECLOSURE I AM TRYING TO SHORT SALE FIRST

i need morgtage foregiveness law applicaton, where can i find it..

Hello. My question is this. I own two homes. One is in my wifes name and one is in my husbands name. The one in my wifes name was her’s prior to our marriage. My wifes home (our home) was under contract to be sold as a lease purchase. Long story short, we have been a victim of organized scheme to defraud. Both “buyers” for the property have now been charged by the State Attorney’s office with organized scheme to defraud and they have both been arrested and a hearing has been set. My husband and I thought we had our second home sold and because it was all a scam and we have this home back we can not afford them both and we are having trouble selling even at a drastically reduced price. My husband is in sales and pay has been reduced, now making only a third of our income. This along with being a victim of fraud has put us in great financial strain!! We need help. We would like to keep our primary home and keep our other home on the market until it sells. Our primary home was purchased when the market was booming of course and we paid $290,000. Two homes in my neighborhood (the exact same floor plan) sold for $170-$189K. Please forward any advice to me as we are now 2 months behind. We tried to speak with Countrywide several time but they were not willing to help us. They said we were still a customer service issue until after the 2 months. So basically they were not willing to help us until we were in default and were on our way to ruining our credit. We do have a real case of fraud and our home is worth way less and we need real advice please!!!

I currently own 2 homes (one primary resident and other investment home). Currently I am 3 months behind on mortgage payments with the investment property only because my tenant moved out and my income has decreased since I purchase the home 1 yr. ago. The property has been up for sale for approx. 4 months and no offers. I need to know if this property forecloses, will I be eligible for the debt forgiveness. I hope I will also be eligible for the insolvency because my debt will outweigh my assests by a long shot. Please advise.

This law doesn’t apply to investment property. You need to speak with a tax expert about your options on this.

I lost my job and my roommates to make my house payments on my St. Pete, Florida house. This month of Aug will be my first payment not paid. I called Chase Morg. and asked for help and they said they can’t help me until I’m 2 months over due on my payments. My orginal loan was 235,000 and I owe 360,000 from adding a pool and paying off bills in the last 6 years that my ex and I owned it. It’s on the water and usually worth 500,000 last year. I refinaced 2 years ago and paid my ex 30,000 and kept some money for me to start over and put the house in my name. That’s when I started getting roommates to make the payments. This month of Aug. of 08, I can’t make the payments, the roommates lost their jobs and I lost my job, also, but I’m still finishing my externship so I’m trying to finish it in one more month before trying to look for another job. I was just going to finally let the house go to foreclosure, file bankrupcy and just give up. But, my girlfriend said that if the bank doesn’t get the amount owed on the loan, that I will have to pay 25% of the balance, something to do with taxes owed or something and that whatever job I get they can garnish my wages to get it and filing bankrupcy will not help it, either. Can you tell me who to talk to or what to do. I’m trying to get more roommates to at least be able to live in it until the bank takes it. Some people told me that it may take 6 months or more before they foreclose. I was going to just stay in it, keep the roommates and keep trying to sell it. Please help. I can’t believe, I’m 54 years old and starting all over with nothing to show for all my years of keeping good credit and trying to keep a house and starting my whole carreer over.

Shirl,

You need legal and tax advice from someone who is well versed with Florida law. I’ll email you a few names and contact info.

I have been in the middle of a loan mod from my lender for 9 months and they still have not come up with any new terms. We stopped making payments to them 8 months ago per the agreement between us and them. I don’t know how long this is suppose to take but 9 months is a little long. This has been very hard on us and I’m at the point of telling them they can have the house. My question is will they come after us for any lost money if we walk or short sell. (the house is very up-side down at this point and will not sell to break even in the next few years) What should we do? any help would great. CRS

@CRS -
You need to speak with an attorney who understands the legal options available to both you and the lender. You may also want to contact HopeNow for a referral to a non-profit who can help you negotiate. they do this at no cost to you. If you are in California, I have one for you to contact.

We had a house in Sacramento Ca and have tried to sell it just after the market started dropping. I accepted a new job in Oklahoma and since the house had not sold we rented it. After we moved away our renter lost her job and had to move. Unable to find another renter we decided to go for a short sale. This started in Jan 08 and again no sale we stopped with one company and hired another who themselves buy homes. Now it was July 08 and with the house pmts past due this company put in offer to our lender to buy the house but to our disbelief they turned down the offer and foreclosed on the house July 28th. Now I have no idea what is going to happen. The first loan was backed by VA and the second was not purchase money and they didn’t receive anything. When the loans were taken out the house was our primary home not investment so will we fall under the debt forgivness that was passed? We need to know what will happen know, will VA come after my hubands retirement? Will the mortgage companies file judgements and or send us a 1099? All of this is so overwhelming. Any ideas on what we should do?

@Lee - If a lender forecloses on a purchase money loan in California, they can’t seek a deficiency. A 2nd that is not purchase money that becomes a sold out junior, meaning when the 1st foreclosed, the 2nd got nothing or less than the full amount owed, can seek a deficiency. The VA can’t come after your retirement, but you can’t buy a home again with a VA loan until the VA recoups their loss on the foreclosure.

You should talk to an attorney about your options with regard to the 2nd.

We have a home in Florida that we bought in 2004. We refinanced into an adjustable rate mortgage(Not knowing what was to come). Then when the smoke signals started to go up that lead to this current crisis, we refinanced again back to an fixed rate. We did get some cash out to pay off some bills.

My husband is a truck driver and when fuel started to go up so much it on top of everything else, his worked slowed down to just short of a screeching halt. We tried selling the home on our own, no go. We hired a realtor (some one who was willing to do it at a reduced rate as a favor to us) , but again no go.

So knowing we could not afford the home, we got one of the drivers from his company to agree in writing to lease the home for two years and when our pre-payment penalty was up, buy it for the balance.

Things were going well until he and his wife had a falling out and our now going their separate ways, leaving us stuck. We know foreclosure is an option, but we want to avoid it if possible.

Our question is they have mentioned a deed in lieu before that would keep us from owing anything, but isn’t that basically a voluntary repossession?

We would like to do a short sale on this but having to pay taxes on this would be difficult to say the least. Have we unwittingly screwed ourselves out of benefiting ourselves from this legislation because we have had someone living in the home? Or would the fact it was initially bought and lived in as a primary residence count?Any constructive suggestions would be greatly appreciated ASAP.

@Dru -
The debt forgiveness applies to “acquisition debt” on a primary residence. That would be the amount of debt you initially incurred when you purchased the property. If you refinanced, even if more than once, the initial acquisition debt is still covered. The definition of primary residence is the other issue here. The Internal Revenue Code 121 says that you must have lived in the property for 24 of the previous 60 months. You need to speak with an attorney or tax expert to advise you on your options in light of the tax code.

Hi! We are in California, and considering putting our house for short sale, after purchasing another with half the payment we are paying right now. So my questions are, will we have to pay back the differences and how many years of bad credit?what are the consequences?

@Ric -
The answer to both questions depends on how the short sale is negotiated. Have you talked to an attorney and/or tax expert yet? You should do so prior to signing any listing in California.

House was bought in Aug of 2005, with a 30 year fixed rate, after buying house, we were approved for a 50K equity loan in which we used approximately 30K to upgrade our home. Our home is worth 100K less than what we payed for it including equity loan, any suggestions? We are current on everything, but are considering short sale, or foreclosure and purchasing another house due to being approved through a lender for another home loan. Should we walk away and cut are loses but gain in another home, or stay in and ride this out in HOPE of reconstructing our current loan.
Family has grown and a larger house for the same payment does not sound bad. HELP!

@Greg -
You have at least 3 issues on the table that would warrant a consultaion with legal and or tax experts:
1. debt forgiveness on the 2nd for any monies that did not go into ’substantial improvements”
2. possible deficiency issues on both loans
3. possible state tax for debt forgiveness

I would suggest that you understand the ramifications of those three issues prior to moving forward with another purchase so that you know what future liability you may be facing.

Question:

I live in CA….I have a fist and a second, both of which are purchase money loans. I tried to get a loan mod several months back and was denied. So now I am trying to short sale. I have had two buyers back out, but I do have an approved selling price from countrywide of $575,000.00……my first loan is $620,000.00 and my second is $150,000.00…….so my question is….should I shortsale or walk away and let the bank foreclose? where are my liabilities and if I foreclose, is there new laws on how long I have to wait to buy another home?

One more question:

If I have non recourse loans……and I shortsell…..is there anything I need in the shortsell agreement to protect me?

@Chris - for the purchase agreement in California, your agent should be incorporating the short sale addendum and possibly the purchase agreement addendum.

With respect to the the lender approval, you want to make be clear about the lender’s rights to pursue a deficiency. Most of the boilerplate approvals I have seen from lenders agree to release the lien, but do not mention the release of the note. Your approval should be reviewed by an attorney prior to you signing it.

WE NEED SOME ANSWERS, IF ANYONE HAS ANY…
WE LIVE IN LV, NV, & PURCHASED A HOME IN AUG.2007. WE ALSO HAD ANOTHER HOME THAT WE HAVE OWNED SINCE 1989 THAT WE HAD A CONTRACT WITH A COUPLE TO PURCHASE THE PROPERTY WITHIN 3 YRS. SORT OF LIKE A LEASE WITH OPTION, BUT WE SOLD IT TO THEM ON PAPER AT WHAT IT WAS WORTH 2 I/2 YRS. AGO. SO NOW THAT THE MARKET TOOK A DIVE, THEY HAVE DECIDED NOT TO PURSUE BUYING IT, & BASICALLY GAVE IT BACK. SINCE WE CANNOT AFFORD TWO MORTGAGES, WE HAVE DECIDED TO MOVE BACK INTO OUR ORIGINAL HOME, & LET THE BANK FORECLOSE ON THE NEW ONE. ARE WE ELIGIBLE FOR THE DEBT FORGIVENESS ACT ON THE NEW HOME SINCE IT WAS OUR PRIMARY RESIDENCE FOR A YEAR, & WE CAN PROVE WE HAD “RENTERS” IN THE OLD ONE? DOES THE DEBT FORGIVENESS ACT APPLY TO DEED IN LIEU OF FORECLOSURE AS WELL? HELP!!!!!

HELP, We live in Texas, Purchased a home in October of ‘06, and trying to refinance to roll all the fee’s into the loan. The house appraises at $225K, but loan is at $247K we my ARM is up in November and the rate will sky rocket, any one can give some directions or comments on this…. How do we get the appraisel for 247K?

We are presently $100,000 top heavy on our home. We have excellent credit. We had a ARM and it is set to reschedule next month. We were in the process of considering a short pay but before we sent in our request to the Lender, they sent us a letter with a forgiveness debt of almost a half of the original loan and the only conditions in this letter was that we need to close within a month once financing is secured by another lender because they are not a refinance company. They also advise us that they will send us a 1099 form at the end of the year. I am getting conflicting information and I want to know if the lender initiate this process and you comply, will this still affect your credit? And also how does the IRS determines who will be taxes on the forgiven debt?

hi..Mr Bob My house was sold as a short sale Oct 15,2008 and we are defaulted for 5 months. what credit score can i get for that before is 650 Fico? pls explain to me.

Second question, we barrowed 1st and 2nd loan 105,000 and 423,000 we are in california and the house sold for 303,000. so are we liable to pay the whole amount of the descripancy for our loan? I want to make sure coz we bought the house dec 2006 and we never Refinance the house and the house no equity when we sold that last oct 15, 2008.Enlighten me..

Does the 2007 law cover Deed of Lieu?
I am undecided about a short sale or Deed of Lieu. What would be better?

We have our primary home in Bristol Pa.we have a second home in Placida Florida amount of morg, is $281.000 we are falling behind on our bills & we need to do something to get out of Florida,if we do a deed in luie can any one take my primary home or assetts,thank you

I’m looking for contacts in Southern California that can help with my situation. I bought my house in Jan 06 for 435K, 80/20, and it is now only worth about 250-300K, so can’t refi. I have not been late, can afford the payments (until it adj in 3 yrs) but I didn’t plan on staying in this house, especially when I can buy a much nicer one at half the price. Like others, I feel like I’m wasting money and because I have not been late the lenders won’t help. What’s the best way to proceed?

I don’t see this as good. Other folks who are relieved of debt from credit cards, business loans, etc. will still have to pay income tax on “phantom” income or debt forgiveness. Either you get rid of that provision altogether or everyone pays. It isn’t equitable that one group of folks get preferential treatment.