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Question please: just bought a condo in Florida, will probably move there in Jan 2013. I want to foreclose the house in CA, also, I have an equity loan.
Is my condo in jeopardy, will the banks be after me upon foreclosing ?
The equity loan is with a diff bank than the house mortgage
Do I get a chance to get approved for short sale having the condo in Florida? I will apply for homestead in Jan 2013 only, since in FL can do it once a year only.
Will the equity loan be forgiven?
If the short sale is approved let's say in 3 mos and the house doesn't get sold this year, am I still eligible to be forgiven since the approval was done this year ?
I am planning to stop pmts to both mortgage and equity loan this month.
Buy and bail means that someone bought a second home while their credit was still good but knowing that they could not afford both homes. The bail part is when the person quits paying on the first house. This is the definition the OP asked for, no judgement involved.
From the looks of it, you will owe a deficiency judgment OR owe 1099C cancellation of debt taxes.
It's one or the other. Since it's a HELOC, it doesn't matter if California is a recourse state because HELOC's automatically make the loan recourse in California.
And it doesn't matter what the HELOC is used for (home in Florida etc). That's besides the point in terms of taxes owed.
OP is better off getting legal help.
In Florida, any Federal liens can over ride a Florida homestead exemption.
That means if there is 1099C cancellation of taxes and IRS taxes is owed, the OP's homestead exemption CANNOT protect them.
The mortgage and forgiveness act expires at the end of this year and if the HELOC was not used for home improvement, OP will be liable for IRS taxes...thus tax liens on even a Florida homestead home.
Just to add...fraud (buy and bail) also constitutes another example to losing the Florida homestead exemption.
OP, they got you cornered if you try to do the homestead exemption in the State of Florida.
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