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What are the tax ramifications of foreclosure?

Posted on: 28th Jun, 2007 12:14 pm
i have a rental property that i am unable to make payments on, it is currently vacant. the mortgage company will not negotiate a deed in lieu of foreclosure so i am forced to let it go through foreclosure. the house is not worth what is owed. owe 63, 000. it recently appraised for 53, 000. what are the tax ramifications of the foreclosure for me and can the mortgage company file for a deficiency judgement? i live in the state of ohio.
Welcome Meme,

If the property goes into foreclosure, it will have a negative affect on your daughter's credit report if her name is mentioned on the mortgage. If she wants to get rid of the property, she can apply for a short sale with her lender. If the lender agrees to it, then she will be able to sell off the property and her credit will be lowered by 80-100 points. However, she will be liable for paying the balance amount resulting from the property sale.
Posted on: 03rd Nov, 2010 10:40 pm
In regards to your rental property Vpdawn, you need to know if Ohio is a state that will go after you for the difference the house may sell for. Secondly you need to go to the irs website or google the Mortgage Forgiveness and debt relief act.
Posted on: 17th Nov, 2010 02:05 pm
I owe 106k on a rental unit appraised at about 80/85. My income has dropped 50% the last few years and I can't make the mortgage payment unless I have a tenant. Am I better off walking away, or trying to put someone in their hoping things get better the next few years? what's my best option?
Posted on: 03rd Jan, 2011 09:58 am
Hi phillyd!

Welcome to forums!

A foreclosure will have a severe negative affect on your credit report and you won't be able to buy a new property within the next 3-4 years. It will be better if you could place the property on rent.

Feel free to ask if you've further queries.

Sussane
Posted on: 03rd Jan, 2011 08:59 pm
I OWN A CONDO IN NEVADA WHICH I PLAN TO LE THE BANK TAKE BACK.
I AM RETIERED AND NO LONGER KEEPTHE CONDO BECAUSE MEDICAL REASONS AND AND A REDUCTION IN INCOME
Posted on: 19th Jan, 2011 01:25 pm
Redemption is the right to buy back the property from the lender, each state has laws that govern the amount of time you have to possible redeem the property. There are also rules about who can repurchase the property. You can go to realtytrac.com to see a full list of the redemption states and time frames.
Posted on: 19th Jan, 2011 01:30 pm
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