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Greg A asked:
I just heard from a local attorney here in florida, that he is telling his clients to go ahead and let it go into foreclosure because they are going to be forgiven. Has anybody heard that? Is this actually true?
I just heard from a local attorney here in florida, that he is telling his clients to go ahead and let it go into foreclosure because they are going to be forgiven. Has anybody heard that? Is this actually true?
Tags: Ahead, Foreclosure, Foreclosures
August 21st, 2007 |
Tags: Ahead, Foreclosure, Foreclosures
August 23rd, 2007 at 3:55 am
I would ask him about his sources. I haven’t heard of anything that would help out the homeowner in trouble.
August 23rd, 2007 at 5:43 pm
It is true for a small number of people.
If it was the initial purchase loan and it was never refinanced then you will be forgiven the tax burden and a few states disallow a law suit for the default amount. The tax forgiveness is federal income tax, some states (CA is one) will still expect income tax on the full amount of money the borrower spent.
Your credit will be shot in every state.
August 25th, 2007 at 9:55 am
Does he have a actual working crystal ball or something? No one “knows” what the government will or will not do. I, for one, am one of the people sending letters to and calling my congressmen and representatives to NOT pass this legislation.
Why should the rest of the tax paying country pay for the mistakes or outright lies of other who have gotten themselves in this mess?? If it was the mortgage broker or lender who swindled the borrower, then there’s something called a lawsuit which can get their money back.
I’m sorry, but if there is any way of preventing foreclosure, please do so. Even if it’s a short sale. Foreclosures weigh a lot more heavily in your credit report.
August 27th, 2007 at 2:00 pm
Absolutely not. That attorney is setting himself up for a lawsuit by giving information that is legally inaccurate.
There is no law, no lending practice, that supports that.
The banks may have been giving the loans, but people also signed up for ARM rates that went up…that is a CHOICE that people make. People that make poor financial choices usually make them over and over again.
The only people that I know that are losing their homes, have always made poor financial choices.
You can see from their credit reports, that they always keep balances on credit cards, that they “equity strip” the homes that they buy, they are always trading cars, changing jobs, etc…you can’t keep that up forever.
PS: To “The Mom”…taxes and a credit report isn’t the same thing. If you enter into a short-sale the ONLY thing that has been forgiven is that you don’t have to pay taxes as income on the amount you didn’t have to pay…but on a foreclosure that doesn’t keep the bank from seeking a deficiency judgement against you, and it doesn’t keep a future lender from holding it against you….AND THEY WILL.