The letter attached to this site title "non-deficiency letter" and the one I just received from BofA states the deficiency will be waived. But in the next sentence it says, BAC home loans will report debt as "settled as less than owed" and issue a 1099 for the remaining balance. Why are they issuing a 1099 for the difference? if they've already said they've waived the deficiency, there would be a difference?  Isn't that what the 1099 is for, the deficiency amount? doesn't this open the door FOR a deficiency? Seems hypocritical? I'm confused and the tax preparer for the my client isn't helping them understand this. My client is eligible for HAMP money and it's purchase money, however, this "issuing a 1099" seems like a catch 22! Please help!