I Never Received a 1099 After My Foreclosure

[lindsayk]

My question involves a foreclosure in the State of: New York.

An investment property of mine unfortunately foreclosed in October 2007 after I became behind on payments. It was an 80/20 and the second mortgage was sold to a collection agency. I know I am still liable for the second mortgage, but I never received a 1099 for the first after the auction? What does this mean, and what do I do? Is it possible that the bank reported this to the IRS and not me?? How do I proceed?

[Mr. Knowitall]

If you did not get a 1099, it most likely means that the creditor has not yet written off the debt.

[flyingron]

The 1099C means they wrote off the debt. Someone might send you a 1099A to report the sale. You don't have a taxable issue for the debt cancellation until the lender abandons their recourse. The foreclosure sale itself usually will not incur any tax liability immediately (except in the case you actually had a capital gain, but that's unlikely in a personal residence unless you refi'd it after it appreciated to "take money out.").

[lindsayk]

The house was not actually sold until Dec 2009 by auction. The creditor had 90days to obtain a deficiency judgement (New York), in which they did not. I should have received a 1099 in 2010, and I did not. Nothing this year, 2011, either. I am still in limbo.. My lender was BNC Mortgage (Lehman Brothers). Lehman Brothers filed bankruptcy. Could this be the reason? They were crooks,, long story, but they were the reason I became behind on my payments anyway.