donnaattusca…, Home Buyer in Boynton Beach, FL

I just read with the law extended to 2013 for short sales that banks are not required to issue you a deficiency. Does that mean a bank can refuse to?

Asked by donnaattuscany, Boynton Beach, FL Wed May 22, 2013

Give you a short sale unless you have a note and in that case you are on the hook for the entire mortgage at some time in the future if they want to peruse the remainder of the mortgage.
I consulted a lawyer couple of lawyers and they never said anything about this.

Help the community by answering this question:



There are two interrelated issues. The Mortgage Forgiveness Debt Relief Act which was extended through this year allows taxpayers to exclude income from the discharge of debt on a principal residence. So even if the bank issues you a 1099 there would be no federal income tax due if you close the transaction by the end of the year.

Banks like money and they will do what they can to get funds out of you now, or at some point in the future. Agreeing to a short sale does not take the right of ten lender to go after you for the difference between what you owe and what the short sale net proceeds. That is why it is critical you are working through a qualified firm when negotiating a short sale as you want a waiver of their ability to go after you in the future for that amount.

Hope this helps....

Tom Priester e-PRO
"Results Driven Real Estate"

Keller Williams Realty
561 308-0175
1 vote Thank Flag Link Wed May 22, 2013
I am not a lawyer and cannot give legal advice.

We have been successful in getting homeowners off the hook for the deficiency, as well as, getting homeowners up to $23,000 in relocation assistance. Every file is different. You may qualify for HAFA, and be relieved of the deficiency. Even if you don't qualify for HAFA, it is possible your bank may waive the deficiency, or part of it. Feel free to give us a call to see if you qualify. Please call with any questions.

Eli Givoni
Short Sale Department, LLC
0 votes Thank Flag Link Wed May 22, 2013
Did you ask them? The story is nobody knows what the lender will do until you receive a short sale approval from the lender. The law concerns 1099C for the forgiven amount and is not something that concerns deficiency except that when you are given a 1099C you cannot be pursued for deficiency and since the 1099 is forgiven for primary residence technically the deficiency is forgiven. Bear in mind if the lender does not give you a 1099 and states a pursuing of deficiency in the short sale approval letter they can pursue deficiency, without issuing a 1099. These days lenders are unwilling to pursue deficiency and are opting to issuing 1099 and write off the loss. If you are not too much upside down in your mortgage a few months ago you may not be upside down now and may be able to sell without shorting. Call me if you wish at 561 452-5963 and I can analyze your situation and maybe answer some other questions NO OBLIGATION NO FEES from you, I will do my best to give you the information so you can make an informed decision - Teddy
0 votes Thank Flag Link Wed May 22, 2013
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