Q: Can the bank give me a 1099-C and report my credit as paid less than agreed?
A: Legally? No. Do they do it anyway? Yes. So, you will need to keep that 1099-C as proof that they ‘wrote off’ that loss by essentially ‘giving you the difference of the purchase price and amount owed as income’. The bank can not legally report ‘paid less than agreed’ to the credit bureaus if they accepted partial payment of the not e and also sent you a 1099-C (income to you) for the difference of that note. Talk to a Real Estate Attorney for clarification on the subject. If needed, you or your attorney can contact the bank at a later date about ‘fixing’ their slight oversight in sticking it to you twice.
A: In most states yes, but a lot of the time they will opt to send you a 1099-C and write it off as a loss on their books. The thing that you should know is that VERY FEW lenders will seek a deficiency judgment due to the cost to get the judgment and due to the fact that you probably can’t pay it anyway. 99.99% of the time the lender will send you a 1099-C instead of even worrying about the deficiency judgment, even when they can legally seek that option.
Once they have sent you a 1099-C, they cannot seek a deficiency judgment. They can only do one or the other, not both.
Make a list of the top 10 questions people ask you about your business, services, or products. That's a good start.
Q: Why should I do a Short Sale? If I am going to have to move anyway, why shouldn’t I just allow the bank to foreclose so I can stay in the house rent free for longer?
A: The main benefit of a short sale is that many in many instances you can still stay in your home rent free just as long as if the house were to go to foreclosure and you will still be able to show your mortgages as “paid in full” vs. “foreclosure”. The amount of loss to the bank is usually less in short sale, thus the amount of the 1099 to the homeowner in a short sale is less. You will also want to have an expert on your side dealing with the lender. If you allow your home to go to foreclosure, there is no one there to help you clean up the mess and pick up the pieces as you struggle with bad credit for the next 7-10 years.