QUESTION
If a 2nd Mortgage holder issues a 1099C on a house because there is not enough equity to foreclose, is the 2nd mortgage no longer valid?
Asked on Apr 03rd, 2013 on Foreclosures - California
More details to this question:
How do I get the mortgage removed from title?I'm still in the house and had to claim the full mortgage as income on my tax return. Since they issued a 1099C to me I'm assuming they can't collect the funds from me any longer and since I own the house they can't take my asset to pay off the mortgage since they claimed they gave the funds to me as income. Thanks for your responses.
1 ANSWER
1 Award
You are correct, but you will likely need to get the lender to issue a re conveyance of the mortgage to get it off title (at least if your property is in CA), and if they refuse, you will need to file a quiet title lawsuit (for which you will need a lawyer). Also, check with a tax accountant familiar with debt forgiveness tax issues, as you may be able to avoid the tax liability on the phantom gain.
Answered on Apr 04th, 2013 at 9:04 PM