Comments on: Short Sale Tip # 7: Confronting The 1099 Issue In Short Sales http://www.realestateradiousa.com/2008/02/26/short-sale-tip-7-confronting-the-1099-issue-in-short-sales/ Internet Money! Money On The Internet! Wed, 17 Mar 2010 03:35:07 -0500 http://wordpress.org/?v=2.9.2 hourly 1 By: Barry Cunningham http://www.realestateradiousa.com/2008/02/26/short-sale-tip-7-confronting-the-1099-issue-in-short-sales/comment-page-1/#comment-6560 Barry Cunningham Wed, 03 Feb 2010 05:07:39 +0000 http://www.realestateradiousa.com/blog/2008/02/26/short-sale-tip-7-confronting-the-1099-issue-in-short-sales/#comment-6560 Hi Diana..let me very clear...I am not an attorney. Now that I've said that...let me say this. If an attorney told you that..run..don't walk..run..and find another attorney. We have talked so much about this that you need to read this article: http://www.realestateradiousa.com/2009/03/05/1099-vs-deficiency-judgment/ It has a real funny picture on it because this is driving me batty. So here is my answer again. A judgment is what occurs when a Judge (guy or gal in black robe) adjudicates a lawsuit and renders a decision. This is called a judgment. Only a judge can issue a judgment. not an attorney, not a bank, not a realtor. Now that you understand that..now we can move forward. When you are in foreclosure you are in foreclosure as a result of a lawsuit. The bank or mortgage holder is suing you because you are owing them money. The property is there collateral. When you ask for a short sale, you are asking the bank to discount the mortgage. Then someone in your camp will receive what is called a payoff. Once this ammount is agreed and paid, then the bank satisfies the mortgage. They satisfied it because they just agreed to a PAYOFF..there is no more mortgage. It's done..finished...over. Since there is no more mortgage they can not sue you for foreclosure or re-posession of the home any longer so your lawsuit is dismissed. Since there is no more lawsuit there is nothing left under which a judge can render a judgment. People are confusing things and making it more complicated but it really is that simple. The complication comes in when there are in experienced people operating as short sale experts who don't get the paper work done right and may leave people like you in a bad position. I'm not sure of the time frame for the 1099 issuance. i would guess that it would have to be issued in the timeframe for filing Income statements for the year in which the income is actually "earned". Since I don't like to guess, I would say check with an accountant as this is probably a real easy question for them. As for the deficiency judgment question...I'm not guessing at all. ..and oh yeah..I would definitely find another attorney! Hi Diana..let me very clear…I am not an attorney. Now that I’ve said that…let me say this. If an attorney told you that..run..don’t walk..run..and find another attorney.

We have talked so much about this that you need to read this article: http://www.realestateradiousa.com/2009/03/05/1099-vs-deficiency-judgment/

It has a real funny picture on it because this is driving me batty. So here is my answer again.

A judgment is what occurs when a Judge (guy or gal in black robe) adjudicates a lawsuit and renders a decision. This is called a judgment. Only a judge can issue a judgment. not an attorney, not a bank, not a realtor. Now that you understand that..now we can move forward.

When you are in foreclosure you are in foreclosure as a result of a lawsuit. The bank or mortgage holder is suing you because you are owing them money. The property is there collateral. When you ask for a short sale, you are asking the bank to discount the mortgage. Then someone in your camp will receive what is called a payoff.

Once this ammount is agreed and paid, then the bank satisfies the mortgage. They satisfied it because they just agreed to a PAYOFF..there is no more mortgage. It’s done..finished…over. Since there is no more mortgage they can not sue you for foreclosure or re-posession of the home any longer so your lawsuit is dismissed.

Since there is no more lawsuit there is nothing left under which a judge can render a judgment. People are confusing things and making it more complicated but it really is that simple.

The complication comes in when there are in experienced people operating as short sale experts who don’t get the paper work done right and may leave people like you in a bad position.

I’m not sure of the time frame for the 1099 issuance. i would guess that it would have to be issued in the timeframe for filing Income statements for the year in which the income is actually “earned”. Since I don’t like to guess, I would say check with an accountant as this is probably a real easy question for them.

As for the deficiency judgment question…I’m not guessing at all. ..and oh yeah..I would definitely find another attorney!

]]> By: diana boyesen http://www.realestateradiousa.com/2008/02/26/short-sale-tip-7-confronting-the-1099-issue-in-short-sales/comment-page-1/#comment-6559 diana boyesen Wed, 03 Feb 2010 03:34:53 +0000 http://www.realestateradiousa.com/blog/2008/02/26/short-sale-tip-7-confronting-the-1099-issue-in-short-sales/#comment-6559 follow up comment on the previous the home was a primary residence, but had a cash out refinance where the monies were not used to substantially improve the home, so 1099s were important for last years taxes since income loss was at peak. the clients have had a better year this year and the tax liability if it sticks will hit hard. and, yes i have told them to contact their accountant, etc. but it is nice to get answers as the new issues come up. follow up comment on the previous
the home was a primary residence, but had a cash out refinance where the monies were not used to substantially improve the home, so 1099s were important for last years taxes since income loss was at peak. the clients have had a better year this year and the tax liability if it sticks will hit hard.
and, yes i have told them to contact their accountant, etc. but it is nice to get answers as the new issues come up.

]]> By: diana boyesen http://www.realestateradiousa.com/2008/02/26/short-sale-tip-7-confronting-the-1099-issue-in-short-sales/comment-page-1/#comment-6558 diana boyesen Wed, 03 Feb 2010 03:31:31 +0000 http://www.realestateradiousa.com/blog/2008/02/26/short-sale-tip-7-confronting-the-1099-issue-in-short-sales/#comment-6558 Hi, I read through some of your information, and you sound like you know what you are doing on short sales. I read "there is no deficiency judgement" in one of your tips. I took your statement to mean that when the house is sold in short sale and satisfaction of mortgage recorded that there is no deficiency. However, a lawyer told me that if the lender does not agree in writing not to pursue a deficiency judgement then, they still have the option to do so after the foreclosure. What is your response to that? Ok, and the reason I happened to visit your site...I closed a short sale on Dec. 30, 2008. My clients had two mortgages, and they were well aware of the tax consequences, etc. However, in 2009 they were issued a 1099 from the first mortgage co. I received a call from them today stating they had just received a 1099 from the 2nd mortgage co. I searched the IRS site and have tried internet searches. Also left messages for a few accountants I know. Do you know if there is a time limit for the lender to submit a 1099? If so, I would appreciate the input. thanks, Diana Hi,
I read through some of your information, and you sound like you know what you are doing on short sales. I read “there is no deficiency judgement” in one of your tips. I took your statement to mean that when the house is sold in short sale and satisfaction of mortgage recorded that there is no deficiency. However, a lawyer told me that if the lender does not agree in writing not to pursue a deficiency judgement then, they still have the option to do so after the foreclosure.
What is your response to that?
Ok, and the reason I happened to visit your site…I closed a short sale on Dec. 30, 2008. My clients had two mortgages, and they were well aware of the tax consequences, etc. However, in 2009 they were issued a 1099 from the first mortgage co. I received a call from them today stating they had just received a 1099 from the 2nd mortgage co.
I searched the IRS site and have tried internet searches. Also left messages for a few accountants I know. Do you know if there is a time limit for the lender to submit a 1099?
If so, I would appreciate the input.
thanks,
Diana

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