People considering a short sale or a deed in lieu of foreclosure or a strategic default need to consider how the IRS will treat the debt that is forgiven. Because the IRS typically treats debt that is forgiven as "income" A short sale particularly can result in the mortgage company sending the homeowner a 1099 form stating that the homeowner received "income". However, due to mortgage crisis, the federal government has passed legislative relief for most homeowners.
There is a great blog article from Hertsel Shadian, Attorney at Law, LLC, we found that succinctly sets out the tax issues encountered by all the homeowners that are considering a short sale, deed in lieu or strategic defaulting on their home. Read Full Article.
For people who are upside down in their homes, and are desperately looking for a way out, rest assured that scammers are more than willing to take your money. A Huffington Post article about mortgage relief scams explains one type of common scam.
Before you ever, ever, ever agree to hand your money over to any mortgage relief, or debt workout, or distressed loan "specialist" (who may actually be nothing more than a boiler room operator somewhere in Florida), talk to a local reputable attorney about your legal options. For a relatively small fee, an experienced attorney can assess your situation and spell out your options. Read Full Article.