Posted on: 29th Apr, 2011 11:43 am
I negotiated a deed-in-lieu w/o deficiency agreement with my mortgage lender effective 3/4/11. I signed over the deed to my house (mkt value 200k ~ 150k) in exchange for the outstanding debt on the 1st and 2nd mortgages (about 183k).
Today I received a Past Due notice on the primary mortgage showing the full balance and a delinquency of 13k (about 10 months payments). I checked my credit reports and scores, the 1st mortgage is reported as delinquent and the 2nd mortgage is reported as charged off.
It seems to me that the balances on both should be zero ("without deficiency") and the reporting to the credit bureaus should only reflect late payments up until 3/3/2011. The transaction on 3/4/11 was quid pro quo (real estate for debt) so there should be no 'gift' tax obligation, and no debt discharge to report to the credit bureaus.
Can anyone offer a qualified opinion regarding these issues, please?
Today I received a Past Due notice on the primary mortgage showing the full balance and a delinquency of 13k (about 10 months payments). I checked my credit reports and scores, the 1st mortgage is reported as delinquent and the 2nd mortgage is reported as charged off.
It seems to me that the balances on both should be zero ("without deficiency") and the reporting to the credit bureaus should only reflect late payments up until 3/3/2011. The transaction on 3/4/11 was quid pro quo (real estate for debt) so there should be no 'gift' tax obligation, and no debt discharge to report to the credit bureaus.
Can anyone offer a qualified opinion regarding these issues, please?
As far as taxes go, consult a CPA, because the IRS takes a loss as income and you are taxed upon the loss. There is a deduction, but consult a CPA. If you are not in a mortgage deed of trust with a clause in the note that states "Power of Sale Clause," then the lender can come after you for a Deficiency. If you do have the clause, then all the lender can do is take the property back. It depends on your note. Have it reviewed by an attorney. Honestly, I worked for a loan mod attorney, and all I really learned was that the banks will do whatever they want. Forgery, illegal foreclosure, ect. It was just exposed to the public on 60 minutes. You need an RE attorney to make sure you are protected and see a CPA regarding the tax implications.