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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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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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.

Client Wins Mortgage Lottery As BOA Releases Second Mortgage and Forgives Note

One of my clients this past week owns a house worth about $350,000. He has a first mortgage with a $375,00 balance and a second mortgage owed to Bank of America with a balance of $200,000. The client has not paid either his first or second mortgage in over 20 months, and the first mortgage …

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How To Avoid HOA Dues and Other Liability After Surrendering House

A homeowner who  their homes to their mortgage company face costs and liability other than mortgage payments and possible deficiency judgments. In addition to mortgage payments the homeowner is liable for homeowner association dues and assessments that come due after the homeowner stops paying the mortgage but before the mortgage lender completes the foreclosure process.

First Mortgage Deficiency Lawsuits Being Filed By SunTrust Against Ginnn Development Investors

First mortgage deficiency judgments are the exception, but there are certain exceptions. One exception is when the homeowner purchased an unimproved lot in a property developed by the Ginn Development Company owned by Bobby Ginn. The Ginn projects include Bella Collina and Reunion Resort. These developments suffered terribly in the real estate recession. Clients have …

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