Posted on: 03rd Jun, 2009 12:09 pm
I am looking to do short sale, but I have 80/20 loan.
Question.
1. How does it work in 80/20 situation.
2. Will I be still responsible for the difference after the short sale or this be waied and the lnder will give me a 1099-C
Thank you
Question.
1. How does it work in 80/20 situation.
2. Will I be still responsible for the difference after the short sale or this be waied and the lnder will give me a 1099-C
Thank you
hi guest,
i guess, your first lender will go for a short sale. in that case, you will be responsible for the second loan. the second lender will have the right to collect the mortgage dues from you. if you cannot pay the second mortgage dues, then the lender will have the right to charge off the dues.
forgiving the deficient amount will depend upon the lender. generally, in a short sale, the lenders will ask you to pay off the deficient amount. if the lender forgives the deficient amount, then he can issue a 1099-c.
thanks
i guess, your first lender will go for a short sale. in that case, you will be responsible for the second loan. the second lender will have the right to collect the mortgage dues from you. if you cannot pay the second mortgage dues, then the lender will have the right to charge off the dues.
forgiving the deficient amount will depend upon the lender. generally, in a short sale, the lenders will ask you to pay off the deficient amount. if the lender forgives the deficient amount, then he can issue a 1099-c.
thanks
SoCal- ShortSale
Welcome to the forum.
Also in soem cases the first lender will talk to yoru second lnder and negotiate some kind of payment from short sale.
In that case both the lender can give you 1099-c and you will nto be responsible for the deficient amount.
good luck and feel free to ask.
Welcome to the forum.
Also in soem cases the first lender will talk to yoru second lnder and negotiate some kind of payment from short sale.
In that case both the lender can give you 1099-c and you will nto be responsible for the deficient amount.
good luck and feel free to ask.
Yes you will get a 1099C for the forgiven amount. As to the release from liability it is best to receive the original note(s) back from the lender, however this will not happen until after closing. Will the lender release the seller from the unpaid balance and what is the mechanics to acomplish it will be arrived at via negitiation with the lender. This negitiation should be in writing and may take 3 or more months to result in terms accpetable to the borrower. The lender certialy would love to sell the property and keep the borrowers on the hook. The lenders willingness to offer any terms other than that already stipulated in the existing note(s) and mortgage(s) is based upon the lender believing that they getting maximum recovery. The lender will evaluate the current income, expences, assets and liabilities of the borrower The lender recovers substantially more in a short sale than in a foreclosure. This is acomplished because the seller/borrower cooperates in the transaction and the property is sold to an arms length buyer at todays market value. The primary leverage the borrower has is participation in the orderly sale of the property and the best time to hammer out an agreement with the lender is BEFORE the sale closes. Failure to arrive at terms prior to closing means the seller should assume they are responsible for the unpaid balance and for decades to come.
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