Short sale - what to do

ssphoenix · Joined: 10 Aug 2008 Posts: 10

While searching I keep getting mixed feeling about the Short Sale. Anyone has gone through this? This is my primary home and have no other invenstments. Is it possible that I will have to be responsible for the balance? What about the taxes? At this time I could care less wheather I forclose or Short Sale. I'd like to find out the implication of any of these after the fact. Any help would be greatly appreciate.

thank you.

EricJ · Joined: 09 Jan 2009 Posts: 321 Location: New Jersey

Yes you MAY be resonsible for some of the balance and you also may have to pay taxes too.

ssphoenix · Joined: 10 Aug 2008 Posts: 10

Eric,

thanks for your post however, you are not telling me any thing that I don't know. You say "I might be responsible". Well can you perhaps give me more info. Under what circumstances I would have to? What are the criterias that one will be responsible?

Thanks

EricJ · Joined: 09 Jan 2009 Posts: 321 Location: New Jersey

I said you "might be" because it depends upon how your bank wants to handle it. Some will just walk away from the balance and others would try to collect it. There really is no single answer. Have you considered a deed in lieu of foreclosure ?

ssphoenix · Joined: 10 Aug 2008 Posts: 10

Eric,

I am not interested in the bank balance. I can giva rats ass if they are coming after me or not. Fat chance for them to collect, at least in my situation. My question was strictly related to taxes for the balance. What are the changes I would have to pay taxes on the balance? For over 100K, taxes will be quite a chunck of change. Would forclosure make a difference as suppose to short sale?

thanks

David · Joined: 19 May 2004 Posts: 754 Location: Atlanta, GA

When you say "taxes", are we talking about capital gains on the property. If the answer is "yes", you are probably protected by the Mortgage Forgiveness Debt Relief Act in BOTH cases.

That said, I think you need to seek legal advice here.

You are doing the right thing asking questions and learning. Your number one job here is to protect yourself and your family, and there is no shame in that.