Posted on: 09th Jul, 2009 03:27 pm
can somebody who did a short sale refinance borrow more money from another bank to buy more property...an acquaintance did a short sale refinance on his house in nevada. his original purchase price was $317,000, but he refinanced at $167,000 with the bank forgiving the difference. now, he's applied for a loan with another lender to purchase another home for approximately $140,000 (less than his forgiven amount). is this possible? who pays for the $150,000 in forgiven debt?
Hi mrboys!
Welcome to forums!
As the lender has forgiven a certain amount of debt, the borrower will not have to return that amount to the lender. However, the borrower may have to pay taxes on that forgiven amount as it would be considered his income by the IRS.
As far as buying another property is concerned, it would be difficult as that person already has a mortgage. Most of the lenders would not be ready to give that person another loan to buy a new property.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
As the lender has forgiven a certain amount of debt, the borrower will not have to return that amount to the lender. However, the borrower may have to pay taxes on that forgiven amount as it would be considered his income by the IRS.
As far as buying another property is concerned, it would be difficult as that person already has a mortgage. Most of the lenders would not be ready to give that person another loan to buy a new property.
Feel free to ask if you've further queries.
Sussane