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Basically it's money YOU never had and wouldn't have had otherwise unless it was used to purchase a house. It's not like you won the lottery and suddenly you have $400K in cash sitting around to which you can then pass on that cash to the government for thier cut.
Incidentally,
It is ironic that when you invest money in the stock market and sell that stock at a loss (bought for $10, sell for $8) you can deduct a portion of the loss on your taxable income... and that was money that you DID possess in hand.
I posted this thread before with a different title.. Mortgage Debt Forgiveness Relief Act of 2008. .but maybe it kind of blew over a few people..
I'm posting it again because there is a lot of misinformation (along with some good information too).
Earlier this year President Bush signed into a law that says that the difference between what the bank gets in foreclosure/short sale vs. what you owe WILL NOT BE TAXED AS INCOME! It applies to years 2007-2009.
Let's clarify for the sake of not freaking anyone out. The time period has to do with when the debt was discharged or you foreclosed on it, NOT when you actually bought the house. That's means if you are going to foreclose, make sure to do so by December 31st, 2009 !
2. The tax break also has a time limit. It only applies to mortgage debt discharged by a lender in 2007, 2008 or 2009.
Let's clarify for the sake of not freaking anyone out. The time period has to do with when the debt was discharged or you foreclosed on it, NOT when you actually bought the house. That's means if you are going to foreclose, make sure to do so by December 31st, 2009 !
2. The tax break also has a time limit. It only applies to mortgage debt discharged by a lender in 2007, 2008 or 2009.
Thanks for adding that clarification. I left it off thinking that most people would understand or that it was implied.
I was told that HSBC took our condo back because we fell behind in the payments this was in april 08, by may 8, 08 I was getting phone calls and still do from a company representing HSBC for an amt. of $41,000.00 that is the amt HSBC is out of after they took the house back...( I think this was a scam???!!)
On Aug 21, 08 I get a Court Audit from Frederick County MD, that the condo sold in April... Do I owe the deficiency amt of $98 471.23? (I had lady that wanted to buy the condo on a short sale and her highest price was $189,000, HSBC stated they could get more at the auction, they got $171,941.77)
So I just need to know what are my options.. I have called an attorney.. but they $ up front to give advise.. If HSBC had lowered the intest for a year or so.. I would not in the mess... BUT NO THEY COULDN'T
Now I'm paying rent in the amt of a mortgage..What about this bill or law the Pres. Bush signed off on??? Is there any help in Maryland for someone that had they home forclosed on?
To also clarify, I believe the IRS only waives the 1099 on the original mortgage you used to purchase the property. If you have a second loan you took out afterward, or refinanced you will be liable for the 1099 in most cases. And even if you do a short sale and you had a HELOC the lender CAN come after you for years to come for the deficiency.
If your going through foreclosure contact an attorney and CPA immediately!
I was told that HSBC took our condo back because we fell behind in the payments this was in april 08, by may 8, 08 I was getting phone calls and still do from a company representing HSBC for an amt. of $41,000.00 that is the amt HSBC is out of after they took the house back...( I think this was a scam???!!)
On Aug 21, 08 I get a Court Audit from Frederick County MD, that the condo sold in April... Do I owe the deficiency amt of $98 471.23? (I had lady that wanted to buy the condo on a short sale and her highest price was $189,000, HSBC stated they could get more at the auction, they got $171,941.77)
So I just need to know what are my options.. I have called an attorney.. but they $ up front to give advise.. If HSBC had lowered the intest for a year or so.. I would not in the mess... BUT NO THEY COULDN'T
Now I'm paying rent in the amt of a mortgage..What about this bill or law the Pres. Bush signed off on??? Is there any help in Maryland for someone that had they home forclosed on?
since you were foreclosed on, they can come after you for the difference plus fees.
since you were foreclosed on, they can come after you for the difference plus fees.
Brokerdave.. that depends on the laws in their state.. not all states are the same.
In some states the debt is secured simply by the property.. adn they sieze the property and sell it and that is the end of it..
But again.. varies from state to state.. you may want togoogle the "foreclose laws in ? State) to get some idea.. but without a doubt consult an attorney too.
Anyone who was foolish enough to sign for a usurious or risky loan should have to pay the full amount, barring some sort of catastrophic life event that prevents them from working or something.
Enjoy your get out of jail free card, courtesy of the American taxpayer, and more specifically courtesy of those of us who weren't greedy enough to get a ninja loan.
Anyone who was foolish enough to sign for a usurious or risky loan should have to pay the full amount, barring some sort of catastrophic life event that prevents them from working or something.
Enjoy your get out of jail free card, courtesy of the American taxpayer, and more specifically courtesy of those of us who weren't greedy enough to get a ninja loan.
Whatever..we aren't getting squat. The gov't shouldn't be paid taxes on that amount anyway.. I didn't make that money!! And I'mnot being handed money either..
acutally I've lost $100K that I can't write off on my taxes in my home in repairs, renovations and payments!
Don't be so cruel.. be happy you're not in this mess..but don't believe for a second any of us isgetting anything for free at the "taxpayers expense" ..
Aren't getting squat? You're getting a freebie. You're getting debt wiped away. I just can't summon any crocodile tears for anyone that made a bad loan choice. I don't know your specific situation, but if you signed a ninja loan or an interest-only loan or a bad ARM...I don't have any sympathy unless you're suddenly unable to bring in any income through no fault of your own.
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paying back
