Posted on: 27th Mar, 2008 07:50 am
Hello,
I am planning on stopping payments to expedite a short sale for my Primary home from next month. I have a propertytax bill as well that is due early next month. Should I be paying the Property Tax to protect myself or Can I just ignore it?
I have 1st loan with INGDirect and I dont have a second loan. This is refinanced mortgage. I am upside down on the price. Bought it 2 years ago and the price is 180K less than I owe to bank. My commute is 3-4 hours daily and this is stressing me. I am not sure of lender would let me do a short sale as the difference is over 180K. Should I stop payments before even bringing this with the lender and talk to them about short sale once they contact me? what happens if i stop making payments while trying to get a short sale?
I have 401K, cars and future paychecks from work. Since, I dont have 2nd mortgage, am I protected in terms of these?
Thanks for your help..
I am planning on stopping payments to expedite a short sale for my Primary home from next month. I have a propertytax bill as well that is due early next month. Should I be paying the Property Tax to protect myself or Can I just ignore it?
I have 1st loan with INGDirect and I dont have a second loan. This is refinanced mortgage. I am upside down on the price. Bought it 2 years ago and the price is 180K less than I owe to bank. My commute is 3-4 hours daily and this is stressing me. I am not sure of lender would let me do a short sale as the difference is over 180K. Should I stop payments before even bringing this with the lender and talk to them about short sale once they contact me? what happens if i stop making payments while trying to get a short sale?
I have 401K, cars and future paychecks from work. Since, I dont have 2nd mortgage, am I protected in terms of these?
Thanks for your help..
Hi kingno,
A Deed in lieu foreclosure will remain in your credit score for 4 years from completion date. And as far as I know, you will also have to give the lender at least 10% down payment if you are buying a property within 4 to 7 years of a deed in lieu. As far as Short sale is concerned, it will remain on your credit report for 2 years from completion date. The FICO score will drop down by 75-100 points if you are doing a short sale whereas in case of deed in lieu foreclosure, the credit score will drop by 250 points.
So in case of a deed in lieu foreclosure, you will have to wait for 3-4 years for getting a mortgage with good terms and rates. However, you can get mortgage within 2 years of a deed in lieu but you will have to pay high interest rates. Keeping in mind all these things, its better to go for a short sale.
Well, I haven't heard anything about proposal to ignore the foreclosures and house related stuff in future in credit reports. Where did you hear it from?
Thanks,
Jerry
A Deed in lieu foreclosure will remain in your credit score for 4 years from completion date. And as far as I know, you will also have to give the lender at least 10% down payment if you are buying a property within 4 to 7 years of a deed in lieu. As far as Short sale is concerned, it will remain on your credit report for 2 years from completion date. The FICO score will drop down by 75-100 points if you are doing a short sale whereas in case of deed in lieu foreclosure, the credit score will drop by 250 points.
So in case of a deed in lieu foreclosure, you will have to wait for 3-4 years for getting a mortgage with good terms and rates. However, you can get mortgage within 2 years of a deed in lieu but you will have to pay high interest rates. Keeping in mind all these things, its better to go for a short sale.
Well, I haven't heard anything about proposal to ignore the foreclosures and house related stuff in future in credit reports. Where did you hear it from?
Thanks,
Jerry
Thanks Jerry, for the explanation.
My bank just approved this morning with lowered price of 321K and 5K buyer credit with a 1 day turnaround. Now, time to go back and close this within 1 week. Will update you guys on how it goes.
Thanks for all the suggestions and information.
My bank just approved this morning with lowered price of 321K and 5K buyer credit with a 1 day turnaround. Now, time to go back and close this within 1 week. Will update you guys on how it goes.
Thanks for all the suggestions and information.
Hello,
I completed the short sale of my property last week with purchase price of 321K with 5K credit to the buyer. The deal is done, Escrow closed and deed recorded on 24th Dec. Out of 321K paid by the buyer, Bank got 305K, property taxes are 8.5K and buyer credit of 5K.
Thanks for all the help, support and information provided here. Its of great help in guiding me on where I am.
I have a question.... The property tax amt is considered as paid by me or buyer or the bank? Can I claim this deduction when I file taxes next year?
I completed the short sale of my property last week with purchase price of 321K with 5K credit to the buyer. The deal is done, Escrow closed and deed recorded on 24th Dec. Out of 321K paid by the buyer, Bank got 305K, property taxes are 8.5K and buyer credit of 5K.
Thanks for all the help, support and information provided here. Its of great help in guiding me on where I am.
I have a question.... The property tax amt is considered as paid by me or buyer or the bank? Can I claim this deduction when I file taxes next year?
Hi kingno,
As far as I can understand, the property taxes were paid from the escrow. I think you will be able to claim this deduction while you file taxes next year. However, I would suggest you to consult a tax adviser who will be able to help you in a better way in this regard.
Thanks
As far as I can understand, the property taxes were paid from the escrow. I think you will be able to claim this deduction while you file taxes next year. However, I would suggest you to consult a tax adviser who will be able to help you in a better way in this regard.
Thanks
Hi James,
Yes, the property taxes were paid as part of the escrow as they were past due. I am guessing that that I can claim the taxes since they were paid through escrow as part of closing.
Anyone else with similar experience and definitive answer, please?
Thank you.
Yes, the property taxes were paid as part of the escrow as they were past due. I am guessing that that I can claim the taxes since they were paid through escrow as part of closing.
Anyone else with similar experience and definitive answer, please?
Thank you.
Yes, you will be able to claim the deductions on your tax returns.
Hi, just confirmed with CPA and the title company. I can indeed claim the deductions for property taxes since they are paid through title company.
Welcome back kingno,
Thanks for sharing the information. If you have further questions regarding mortgage and related issues, you can post your query in the forum and the experts here will try to answer them.
Thanks for sharing the information. If you have further questions regarding mortgage and related issues, you can post your query in the forum and the experts here will try to answer them.
I have recently been accepted for a deed in lieu. It was an investment property in Florida. Will the lender come after me for a deficiency and am I going to get killed on the 1099. My negotiator said that the lender will not come after me but it seems like he never knows for sure what he is talking about. I am paying $2000. towards the deed in lieu. I have not received the paper work yet. I am a nervous wreck. Also can I file bankruptcy if I get hit with a 1099.
Hi bugger,
In case of a deed in lieu, the lender will not come after you for the deficient amount. As he forgives the deficient amount, it would be considered as your income and thus IRS will charge taxes on that amount. To know more about deed in lieu, check out the following link:
http://www.mortgagefit.com/deed-lieu.html
As far as bankruptcy is concerned, you will be able to file it after you go for a deed in lieu.
Thanks
In case of a deed in lieu, the lender will not come after you for the deficient amount. As he forgives the deficient amount, it would be considered as your income and thus IRS will charge taxes on that amount. To know more about deed in lieu, check out the following link:
http://www.mortgagefit.com/deed-lieu.html
As far as bankruptcy is concerned, you will be able to file it after you go for a deed in lieu.
Thanks
Hello In regards to my short sale, i just got a letter from my lender saying that my account is paid in full and closed. Thanks to all the people who contributed their knowledge towards my case.
Hi kingno,
You are most welcome. And in case you have further issues regarding mortgage and related issues, you can post your query in the forum and experts here may help you with a solution.
You are most welcome. And in case you have further issues regarding mortgage and related issues, you can post your query in the forum and experts here may help you with a solution.
Thank-you for the information. Can you negotiate them not filing a 1099 on a Deed in Lieu. Maybe offer them a cash settlement not to file a 1099.
I guess by law they need to issue 1099 for the difference. Well, at the same time they need to write it off on their books as well. So, we cant escape 1099, for the difference no matter what. As for the taxes on 1099, it is the IRS that is getting the money, not the bank by itself. Maybe you can use that cash settlement money you are talking towards the taxes, if it is not substantial.
I guess by law they need to issue 1099 for the difference. Well, at the same time they need to write it off on their books as well. So, we cant escape 1099, for the difference no matter what. As for the taxes on 1099, it is the IRS that is getting the money, not the bank by itself. Maybe you can use that cash settlement money you are talking towards the taxes, if it is not substantial.