Posted on: 03rd Mar, 2010 10:06 am
I have a 80/20 loan on a foreclose primary residence home in California effective 2009. The first loan did a 1099c which charged off 126k and second loan that did NOT do a 1099 and tranferred the account to a collection agency with the outstanding balance of 83k. Since its a primary residence, am i still covered by the anti-deficiency law or Federal Debt Morgage Act 2007 that will exclude me for being responsible for this debt deficiency? Since they are not issuing a 1099, how will this affect my 2009 taxes?
hi rj,
since you took an 80/20 loan to purchase the property, the second mortgage is subject to the anti-deficiency laws. so, if you have used the property as your primary residence and the second mortgage was taken to purchase the property, you are likely to be protected by the anti-deficiency laws. if the second lender has not sent you a 1099 form, you do not have any income from the discharge of debts and thus, you need not pay any taxes on the second mortgage balance.
since you took an 80/20 loan to purchase the property, the second mortgage is subject to the anti-deficiency laws. so, if you have used the property as your primary residence and the second mortgage was taken to purchase the property, you are likely to be protected by the anti-deficiency laws. if the second lender has not sent you a 1099 form, you do not have any income from the discharge of debts and thus, you need not pay any taxes on the second mortgage balance.