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Diana, Home Buyer in Show Low, AZ

I had a home equity line of credit that was secured by a lien. The first and the equity line was with the

Asked by Diana, Show Low, AZ Mon Feb 23, 2009

same lender. I did a short sale which the payoff figures included the 1st and equity. At the last day before the closing they wanted us to sign a promisary note which we did not. They lifted the lien and the house sold. They took $1,000 and put it toward the equity line and now are coming after me for the payment. They gave my husband and I a 1099 for the full amount. The bank will not give us any accounting of the money and why this was not included in the short sale.

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Diana, I would HIGHLY recommend that you immediately seek legal counsel. Call a local attorney and let him/her get to the bottom of it for you. Yes, it may cost you a few bucks, but if you don't, the long term costs could be considerably higher.

All the best to you!

...randy
1 vote Thank Flag Link Mon Feb 23, 2009
Diana-

Your lender would have had to submit a short sale approval agreement in order for the sale to close. In that agreement, which is formatted much like a letter, would be the terms and conditions which would have been signed by you. A copy of this letter/agreement should have been given to you at closing.

Look over this document to make sure you did not agree to pay the balance or agreed to a promissory note. If your lender was Bank of America or the servicer was Countrywide, it could have been slipped in at the last minute. Also, you should have been previously advised, a home-equity line of credit is considered a non-purchase money loan and can be pursued by the lender. It does not matter if they 1099'd you, they still can try to collect the debt.

They may also file for a deficiency judgment so check your agreement to make sure it clearly states they will not pursue a deficiency judgment. Although they may file, it is unlikely they will not.

What is more likely, is they will continue to pressure you unless you prepare yourself properly. 1) Find that short sale approval letter/agreement to see what grounds they may have for collection. 2) Read it very carefully and look for any wording like "we reserve the right to collect this debt..." or "reserve the right to pursue any and all actions available". 3) If there are any of the above phrases, then you may wish to use an attorney to advise you.

If you have any questions, I have a lot of experience in these matters and can help you a little. You can reach me through my site. I am not an attorney or RE Agent, so I can only give you the benefit of my experience and certainly will not charge you. Good Luck!
0 votes Thank Flag Link Fri Feb 27, 2009
Diana, definitely consult your legal advisor and tax advisor.

There are a couple of different 1099's

1099a
1099c

You might be better off than you think just consult the professionals above.
Web Reference: http://www.TheKeysTeam.com
0 votes Thank Flag Link Tue Feb 24, 2009
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