NEW SHORT SALE APPROVAL? LETTER FROM BOA - MAKES YOU WONDER WHAT IT SAYS!
Almost 2 weeks ago I received for a client - and received several emails from readers of my blog on Activerain - a new language short sale approval letter from Bank of America.
It says: "Bank of America....... retain the right to pursue collection of any deficiency following the completion of the short sale, ...."
It also says, " The difference between the current amount due under your mortgage ... and the current market value of the Property must be reported to teh IRS on the appropriate 1099 Form."
It then says, "..... we will issue a release of lien on its mortgage loan."
OK, I don't understand a deficiency and a 1099 - they are opposites.
I read this letter at a seminar at which I was the featured speaker on invitation of Bank of America, and sponsored and at Bank of America. No one in the room understood it - including all the BoA people.
Has anyone else had to deal with this conflicting language? We have thus far rejected the approval letter based upon language discrepency, but no one at BoA has gotten back to us on the rejection nor the language issue.
Replies to This Discussion
-
Permalink Reply by Bryant Tutas on
-
Clear as mud!! And funny as heck that it even stumped BofA!!! I'm not sure how we ever get short sales closed. My guess is they are leaving their options open.
-
-
Permalink Reply by Jeff Payne on
-
Richard, we are preparing for our short sale mastermind group for next month and Bank of America will be in our group. Can you forward me that letter, of course with the names and account numbers crossed out and I will use that specific example to see if I can get something from BAC.
-
-
Permalink Reply by Richard Zaretsky on
-
Jeff - I think I am going to get to them sooner. I have a meeting with them in 2 weeks and will discuss a solution to it then.
In the meantime I will scan it and post it here.
-
-
-
-
-
-
I saw another recently that looked just like that one from another agent. I know she is going to be in our mastermind group and will bring it up too
-
-
-
Is this a second mortgage or HELOC?
-
-
Permalink Reply by ElizabethWeintraub00697006LyonRE on
-
It seems OK to me but my brain is wired to see it that way. A 1099 and a deficiency are not opposites in my mind because they stem from two different parts of law. One has to do with taxation and mortgage relief. The other is a legal right to pursue the debt. I don't see the conflict.
Elizabeth Weintraub
Broker-Associate #00697006
Lyon Real Estate
Sacramento Short Sale Agent
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
-
-
-
Jeff - it is the first mortgage
-
-
-
Liz -
Call the brain technician for some rewiring! Maybe this will help - They are directly related and that is the problem. There cannot be both a deficiency reservation (which means that there is no forgiveness of the debt of the remaining amount of the promissory note), and a notification to the IRS that the borrower / taxpayer has received income from the forgiveness of a portion of the unpaid promissory note.
In California the rules are somewhat different because the deficiency may not be enforceable if the mortgage is a non-recourse mortgage loan under certain qualifying California statutes. In that case the wiring could be confused - we'll call it "excusable technical problems" - only because you are in California (although this would also apply as an exception in most other non-recourse states). In that circumstance there is still the issue of forgiveness of debt - since there was never a personal obligation in the first place - but that is for another discussion.
ElizabethWeintraub00697006LyonRE said:It seems OK to me but my brain is wired to see it that way. A 1099 and a deficiency are not opposites in my mind because they stem from two different parts of law. One has to do with taxation and mortgage relief. The other is a legal right to pursue the debt. I don't see the conflict.
Elizabeth Weintraub
Broker-Associate #00697006
Lyon Real Estate
Sacramento Short Sale Agent
Lyon Real Estate is not associated with the government, and our service is not approved by the government or your lender. Even if you accept this offer and use our service, your lender may not agree to change your loan.
-
-
Permalink Reply by Myra McCaskill on
-
I just received this same short sale approval letter this morning and I agree this are clear conflicts in the approval letter. I sent an email to the Negotiator with a sample of the Short sale approval letter without the deficiency language in the letter requesting for them to issue the letter without the deficiency language. Did anyone have success in getting them to change out the letter's?
-
© 2024 Created by Short Sale Superstars LLC.
Powered by
**********************************
like buttons