[olecapt]

Originally Posted by asik

But the increasing number of foreclosures will lead to more bankruptcies. No knowledgeable person thinks real estate prices will keep going up.
Deficiency judgments are quite common, as are taxes due on the deficiency. The bank can't write off the loss unless they hit the foreclosed borrower with a IRS Form 1099.

Actual a short sale is almost certain to lead to a 1099. But other forms may not. The bank does not have to supply a 1099 to deduct the loss. Note that the banks have to be careful with appraisals. If they catch one that is for more than the mortgage amount they can end up owing money to the debtor. One of the reasons they don't pursue deficiency judgements is because appraisals lag reality. Thus if you go for a deficiency you might end up with a property that appraises above the mortgage amount even though it can't be sold for that much. Banks are generally realists. Don't ask a question if you might not like the answer.

[asik]

http://www.nytimes.com/2007/07/14/op...et&oref=slogin

[olecapt]

Originally Posted by asik

http://www.nytimes.com/2007/07/14/op...et&oref=slogin

They do no such thing.

It is a complaint that the new bankruptcy act unfairly favors banks who made dumb and unreasonable mortgages. They are unreasonably protected from the consequences of their act.

Or are you claiming that your prior babble dealt with unfair bankruptcy statutes?