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  1. #1
    Join Date
    Nov 2009
    Posts
    2

    Default Foreclosure or Short Sale - Need Advice

    My question involves a foreclosure in the State of: CA

    I have a house that I have not made a payment on in 2 years. I filed for bankruptcy 1 1/2 years ago and they discharged my first mortgage along with my second HELOC in the bankruptcy. I thought this would be the end of the house and the bank would take it away.

    The house is still in my name and the bank has done nothing. I have recently put it up for a short sale and have some interested buyers. However, I am now wondering about the tax ramifications of a short sale and getting a 1099.

    Can I still be responsible for the 1099 if the loans were discharged in my bankruptcy? Can they make me responsible for the fees and interest that has accrued after my bankruptcy was discharged 1 1/2 years ago?

    Should I just let it go to forclosure or would it be better for me to short sell?

    The house will probably sell for $200,000 less than the loan amounts.

    Thank you for any advice you can give on this matter.

  2. #2
    Join Date
    Nov 2009
    Location
    New York
    Posts
    3

    Default Re: Foreclosure or Short Sale - Need Advice

    I don’t know about the CA, here in NY a lender has a right to sue the borrower for the difference between loan amount and amount of the foreclosure (auction) sale. When you do a 'short sale', the lender accepts an agreeable amount of money as a full payment.

    Also, as far as I know (I’m not a lawyer), after the foreclosure your credit history will be damaged for 5 - 7 years, after the ‘short sale’ only for 1,5 years. Those numbers not exact.

  3. #3
    Join Date
    Nov 2009
    Posts
    2

    Default Re: Foreclosure or Short Sale - Need Advice

    But does that apply even if I filed for bankruptcy and the loans were discharged 1 1/2 years ago?

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