Many people do not understand the significance of tax form 1099 in the foreclosure context. A 1099 is an IRS reporting form indicating that the lender has written off a mortgage and is declaring a tax loss. The borrower may have to declare the bank’s loss as imputed income.
Many people facing foreclosure are concerned about income tax liability from the lender’s forgiveness of mortgage debt. If the mortgage lender does not pursue a deficiency judgment and writes-off the loan after foreclosure the lender could send the owner a IRS Form 1099 for imputed income for the amount of…
When homeowners decide to let their upside down properties go into foreclosure they typically stop caring for the properties physical condition. Repairs are deferred unless absolutely necessary.
I have reported recently that some second mortgage lenders have become more aggressive by suing defaulting homeowners personally for a deficiency judgment. I recently received an email from a litigation attorney representing New York residents who purchased an investment home in Florida subject to a first and second mortgage. I…
Several people who are contemplating voluntary foreclosure have asked me whether they should continue paying their homeowner or condominium dues during the foreclosure process. I have recommended that homeowners stop paying homeowner dues if they are voluntarily surrendering their homes to their mortgage lender.
If you plan to walk away from a house and let your mortgage lender foreclose, do you continue to pay property taxes? This is a question often asked by homeowners who own property worth less than the mortgage balance. People are concerned that they will remain personally liable for unpaid…
A divorced female reader submitted an interesting question about alimony payments. The reader relies on alimony payments from former spouse to pay most of her bills. She does not support a child, and therefore, she is not the head of a household.
