Posted on: 09th Feb, 2009 04:52 pm
Hello, I am in need of some guidance.
I own a Rental Property in Southern California. The rental amount was always about 1/2 the mortgage, but i thought this was a sound investment. Since mid August '08 my tenants bailed on me and combined with other financial burdens, I have been unable to keep up with the payments. I was referred to an agent that specializes in Short Sales, but at times he seems unresponsive, and told me to call him once I get the Notice of Default. This has now happened, and I am stressed. I am not worried at all about my credit, and only concerned about the Bank coming after me for the difference or them giving me a 1099 for any forgiven portion. So I called Indymac they said I should use them for the Short Sale as the agent just gets in the way. Does anyone have any experience here. I would prefer to Deed the property to IndyMac and get some kind of guarantee that they won't 1099 me. I am sure the agent won't go for that since his 6% would be out the door. PLEASE HELP ! Should I just dump the agent and let IndyMac take over..? Thank you.
I own a Rental Property in Southern California. The rental amount was always about 1/2 the mortgage, but i thought this was a sound investment. Since mid August '08 my tenants bailed on me and combined with other financial burdens, I have been unable to keep up with the payments. I was referred to an agent that specializes in Short Sales, but at times he seems unresponsive, and told me to call him once I get the Notice of Default. This has now happened, and I am stressed. I am not worried at all about my credit, and only concerned about the Bank coming after me for the difference or them giving me a 1099 for any forgiven portion. So I called Indymac they said I should use them for the Short Sale as the agent just gets in the way. Does anyone have any experience here. I would prefer to Deed the property to IndyMac and get some kind of guarantee that they won't 1099 me. I am sure the agent won't go for that since his 6% would be out the door. PLEASE HELP ! Should I just dump the agent and let IndyMac take over..? Thank you.
Welcome victor.
It's not that you have to pay the taxes on canceled debt once you get a Form 1099-C. Many a times, lenders send you the form for your signature on the statement which mentions that a part of your debt has been forgiven. The Form is then sent to the IRS to make them aware of the fact that the lender has been through a loss because you couldn't pay him. Now, if you qualify for certain conditions, you may be exempted from paying the tax on forgiven/canceled debt.
Now, as far as using an agent is concerned, you can use one to help you negotiate with the lender so that he accepts the short sale. But when Indymac itself has agreed to consider the short sale, I believe you shouln't use an agent. Rather, you should try and manage the situation on your own.
The notice of default implies that you have been unable to keep up the payments. Until and unless you default, the lender wouldn't proceed with the short sale. So, don't be afraid if they have sent you such a notice. Just be confident and have the patience to deal with this issue. It'll take some time but hopefully you'll come out of it asap.
Now, in case you'd prefer to deed the property to the lender, that can be done through deed in lieu foreclosure. The best thing here is, it waives off the lender's right to collect the deficiency. I suppose yours is a purchase mortgage, right?
It's not that you have to pay the taxes on canceled debt once you get a Form 1099-C. Many a times, lenders send you the form for your signature on the statement which mentions that a part of your debt has been forgiven. The Form is then sent to the IRS to make them aware of the fact that the lender has been through a loss because you couldn't pay him. Now, if you qualify for certain conditions, you may be exempted from paying the tax on forgiven/canceled debt.
Now, as far as using an agent is concerned, you can use one to help you negotiate with the lender so that he accepts the short sale. But when Indymac itself has agreed to consider the short sale, I believe you shouln't use an agent. Rather, you should try and manage the situation on your own.
The notice of default implies that you have been unable to keep up the payments. Until and unless you default, the lender wouldn't proceed with the short sale. So, don't be afraid if they have sent you such a notice. Just be confident and have the patience to deal with this issue. It'll take some time but hopefully you'll come out of it asap.
Now, in case you'd prefer to deed the property to the lender, that can be done through deed in lieu foreclosure. The best thing here is, it waives off the lender's right to collect the deficiency. I suppose yours is a purchase mortgage, right?
Hi VictorLandlord,
I haven't dealt with IndyMac personally but haven't heard anything bad about them either. As helping_user has mentioned, you will not even require an agent to deal with them because they are offering the short sale to you.
I haven't dealt with IndyMac personally but haven't heard anything bad about them either. As helping_user has mentioned, you will not even require an agent to deal with them because they are offering the short sale to you.