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Short sale( The remainder amount)?

Stressed out asked:


I See going through all the questions and answers of short sales and see that everyone keeps saying that they will have to pay back (1099) the remainder of the balance, well my question is then what is the Mortgage Forgiveness Debt Relief Act of 2007?

Mortgage workouts, Now tax-free for many homeowners: Claim relief on newly-revised IRS forms??

Can anyone tell me what that is? isnt that where they will forgive that taxable income now?

at least that is what I am being told.

http://www.irs.gov/irs/article/0,,id=179073,00.html
See I asked this question cause I am one of these people facing this problem, me and my husband can no longer make our payments on our 2nd, this is the first month we could not pay and I would like to do a short sale and get out.
What a stressful time and I know I am not alone and this SUCKS :(

Bryan

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This entry was posted on Saturday, July 25th, 2009 at 12:53 am and is filed under Debt Relief. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.

4 Responses to “Short sale( The remainder amount)?”

  1. Dizzy_Lizzy Says:
    July 27th, 2009 at 6:51 am

    Cecil

    My understanding is that it forgives the taxes. I just don’t think this change was well publicized so the general public’s understanding is often incorrect.

    This act did not change the fact that in some states the lender can pursue a former owner for the shortfall – and that would be worse than just paying the taxes on it.

  2. bbwebpuppy Says:
    July 27th, 2009 at 7:38 am

    Laura

    I believe you are correct and this relief will be available to specific borrowers who got caught up in some of the precarious loans being peddled over the past few years.

  3. lyon1977 Says:
    July 27th, 2009 at 3:03 pm

    Thomas

    generally, if it was your primary residence and just a conventional loan, no pmi, you’d just be issued the 1099, which you may not have to claim. If you have an FHA or PMI insured loan, they may want to set up a repayment plan for part or all of the deficiency balance. Usually it is a low payment spread over quite a few years.

  4. Jennifer Says:
    July 29th, 2009 at 11:13 pm

    Melvin

    Hi,
    I used “Credit Solution” to settle my debt and avoid bankruptcy.They managed to reduce my debt up to 58%.I came across this company on NBC News Special Edition.Check it out here:

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