New Florida Law Curtails Mortgage Foreclosure Defense By Bankruptcy Debtors

During the mortgage crises of 2008 through 2010 many of my clients were desparate to hold on to their homes that were under water and facing foreclosure. Some attorneys began to specialize in the area of foreclosure defense. These attorneys were skilled and delaying bank foreclosure actions during which time the homeowner occupied their home …

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Statute of Limitations For Credit Card and Mortgage Debts

I have been asked many times over the years about the statute of limitations applicable to mortgages and credit card debt. The statute of limitations is a legal term that determines how loan may a bank due a debtor for missing a mortgage payment of defaulting on payments under a credit card agreement. The most …

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Congress Restores Tax Exemption From Imputed Income After Foreclosure

Homeowners who lost their home to foreclosure in 2015 were faced with either of two bad financial outcomes if the home was worth less than the mortgage balance at the time of the foreclosure sale. Either the bank pursued a deficiency judgment or the bank waived the deficiency and the IRS taxed the homeowner for …

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Lender’s Release of Personal Guarantee Does Not Impute Taxable Income

I recently wrote a blog post about avoiding imputed income from debt forgiveness following a foreclosure against a business owned property. I suggested that a business that is organized as a C corporation would not pass through imputed income to its individual owners, but I stated I was unsure if there would be personal income …

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C Corporation Planning May Avoid Imputed Income From Mortgage Debt Forgiveness

Often, the biggest problem with mortgage deficiency actions related to foreclosed investment property is the possibility of imputed income from debt forgiveness. Even if the mortgage lender does not pursue collection of a deficiency judgment, or if the lender settles with the mortgagor for partial payment of the total deficiency, the lender is likely to …

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Time Limit For Second Mortgage Lender To Sue After Foreclosure Sale

As of July 1, 2013, the statute of limitations within which a bank may seek a deficiency judgment was reduced from five years to one year for residential properties with no more than four dwelling units. An attorney called me last week and asked whether the one year time limit applies to suits brought a …

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Dual Tracking Rules Prohibit Foreclosure During Mortgage Modification

During the height of the real estate recession many homeowners told me stories about how they were surprised by aggressive foreclosure by bank attorneys when they thought they were moving toward mortgage relief settlements with the bank’s representatives. That bank practice is known as “dual tracking”; that is, banks engage in a mitigation track at …

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Avoiding Tax Liability in Settlement of Mortgage Debt

I’ve written before that property owners who negotiate a waiver of deficiency judgment on property other than their homestead face potential income tax for forgiveness of debt unless they can prove they were insolvent at time of the debt waiver. I’ve also commented that some attorneys have stated they could arrange to avoid this tax …

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Uptick in Mortgage Deficiency Claims Prior to July Deadline

Any mortgage lender that has foreclosed on a property from the beginning of the housing recession through June 30, 2012, has until July 1, 2014 to move for a deficiency claim or their deficiency claim is forever barred. Are we about to see an avalanche of backlogged deficiency claims in the next two months?

Homeowners Face New Tax Liability in 2014 From Foreclosures

Since the recession started in 2007 people facing foreclosure of their primary residence were concerned mostly with deficiency judgments against them personally. Deficiency judgments mostly did not materialize as first mortgage holders rarely have pursued personal judgments. This year, the homeowners’ concerns are tax related.

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