Posted on: 05th Aug, 2009 04:17 pm
My attorney is negotiating with my lender's attorney regarding an investment condo I own that is in litigation. The lender's attorney said they will entertain either a DIL or a short sale but that the DIL carries no 1099C. My accountant tells me not to worry about the 1099C as it is business but I need to know...if I took the DIL and they mark it as above, will my credit be tarnished. There are no late payments as Im up to date (performing loan). I just am under the impression that a DIL, no matter how it is reported is still a foreclosure as such.
Please, I need some advice ASAP as I must let my lawyer know what I decide. Thanks.
Please, I need some advice ASAP as I must let my lawyer know what I decide. Thanks.
Welcome stevemia,
A deed in lieu will affect your credit score and lower it by 250 points. As far as 1099c is concerned, the lender would issue it only if he is forgiving the balance amount from the sale of the property. As your lender has mentioned that he won't issue a 1099c, I think he would ask you to pay off the deficient amount resulting from the sale of the property.
A deed in lieu will affect your credit score and lower it by 250 points. As far as 1099c is concerned, the lender would issue it only if he is forgiving the balance amount from the sale of the property. As your lender has mentioned that he won't issue a 1099c, I think he would ask you to pay off the deficient amount resulting from the sale of the property.
According to bank attorney, the DIL is acceptance from the bank of the property and therefore no need to issue the 1099C but I'm concerned that even though they are "accepting it" back, and marking it "Disputed but Resolved", that there are codes that will go on my credit report distinguishing it as some kind of foreclosure.
The short sale, however, if accepted by the bank, will issue me a 1099C since it is investor property, but my accountant is not concerned as she says we can deduct it.
I believe the short sale is going to hurt my credit for much less time and please consider, THERE ARE NO LATE PAYMENTS, so the hit should be minimal according to what I read.
Could you please comment further?...Thanks!
The short sale, however, if accepted by the bank, will issue me a 1099C since it is investor property, but my accountant is not concerned as she says we can deduct it.
I believe the short sale is going to hurt my credit for much less time and please consider, THERE ARE NO LATE PAYMENTS, so the hit should be minimal according to what I read.
Could you please comment further?...Thanks!
Hi stevemia,
A short sale will lower your credit score by 75-100 points. However, as far as I know, after a short sale, you would be liable for the deficient amount resulting from the sale of the property. In case, if the bank forgives the deficient amount, then only he would issue a 1099c.
Thanks
A short sale will lower your credit score by 75-100 points. However, as far as I know, after a short sale, you would be liable for the deficient amount resulting from the sale of the property. In case, if the bank forgives the deficient amount, then only he would issue a 1099c.
Thanks