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willingtocope

So, I sold the house...now what?

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Ok, the bank finally had enough paperwork, so they approved a sort sale the day before Thanksgiving.  Lien released, title transferred, new owners have moved in.

 

So, I look at my account online, and it shows the sale price as a payment with a balance due for the rest of the mortgage.  I realize it hasn't been a complete billing cycle as yet and their computer system that feeds their web site is antiquated (it actually shows 2 payments...one for $99,999.99 and a second for the rest of the sale price), but...

 

Anyone have a clue as to what happens next?

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I'd be asking for two (2) items,

1.) Telephone banking center's confirmation their computer reflects what your in-hand paperwork reads. Calling daily until it is confirmed.

2.) That crucial 1099 form for your upcoming tax payment due on whatever amount was "forgiven" in your short sale. Unless you have more money than the average bear, Boo Boo, to paraphrase good ol' Yogi Bear, that tax bill is going to take quite a bit of socking cash away to cover it by April 2015, 4 "short" months away.

I don't know what your tax bracket is, or what your "short sale" has you paying

income tax on. But, here is an example,

AVERAGE $50K AND UNDER ANNUAL INCOME?

5%, 2012, ca, SEE:

http://usatoday30.usatoday.com/money/perfi/taxes/story/2012-01-19/romney-tax-rate/52682372/1?fullsite=true

Now, read the following, plugging in your own (personal) numbers along the way, basically your loan total (s), and short sale remainders, then, multiply them by your percentage paid in income taxes. That will be what looms, "short", or, large as we near April 2015.

CLICK!

http://www.irs.com/articles/how-avoid-federal-taxes-short-sales-and-other-debt-settlements

Best holiday purchases this year? Setting that short sale income tax indebtedness away for IRS and entering 2015 without that monkey on your back!

Maybe even have some post-holly daze sale money to upgrade linens, an appliance, get a board game, etc guilt- and debt-free!

Warmly,

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@HelpingGreg ... thanks.  I've already run 2014 estimates thru TurboTax and, because it fits the "principal residence" criteria, I don't think I'll be taxed on the short sale difference.

 

I am concerned that the bank may try to collect the difference.  (Actually, the bank is now working as a CA collecting on behalf of FHA)

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Then the first question is, did the mortgage holder forgive the difference or not? If they did, then they cannot collect on it anymore per the contract. If they did not, they you will not get a 1099-C because technically, they can still collect on the money (although reality is a different case).

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@WhoCares1000 ... exactly.  The bank did approve the short sale, but their "approval" document includes a paragraph that reads:

 

"Pursuant to HUD Mortgagee Letter 2008-43, mortgagors, acting in good faith, who successfully sell their properties in a pre-foreclosure sale, are relieved of their mortgage obligation"

 

I'm not sure how to interpret that.  I expect a 1099c.  I just don't want any more hassle with the bank.

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I would ask an attorney because of the amount of money at stake here but I would assume that would say that they are forgiving the short amount if brought up in court.

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