My question involves a foreclosure in the State of: CA
I submitted my paperwork and hardship letter to bank on Tuesday. Received received a call from the bank on Friday (very quick, 3 day turnaround).
They are willing to do Deed in Lieu. They asked me to pay this year property taxes and the insurence. I told him that I can cover half of the taxes and asked them to bite the other half. He said he will get back to me on Monday with final terms. and said that the process will take 2 months.
I feel releived..Better than letting the house into forclosure.
Here is my question.
He mentioned that when the bank was able to sell the house, bank will issue me 1099 for the losses incurred. What are my liabilities once the house is deeded back to the bank? Can I be covered under mortgage forgiveness act? Can some expert throw some insight into this please?
House was bought in July 2006.
(Will it benefit if I own and stay until I complete 2 yrs, for 1099 ans tax purpose?)
bought for 536,000
Refinanced last time with appraisal of 650K and bank was able to put all in 1 loan for 536,000. No second loan.
I owe 531K now. Never pulled extra money out of the house.
I am concerned about the 1099. The difference will be atleast 200K if they sell it. Am I liable to pay taxes on those 200K income in the future? Can I be covered under mortgage forgiveness Act? Please Advise?