What is a Certificate of Satisfaction
Hello:
I completed a short sale a few months ago and I see that the lender filed a deed called Certificate of Satisfaction.
What does the certificate of satisfaction mean?
Are they waving their right to pursue for the deficiency amount?
Any help is appreciated.
Replies to This Discussion
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Permalink Reply by David on
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This is what the Deed states:
"Satisfaction of Security Instrument Deed Only"
"The undersigned is now the secured creditor in the security instrument identifies as follows:
Type of Security interest: Deed Of Trust
Original Grantor.......My name.....
Original Secured Parties : ....Bank.......
This satisfaction terminates the effectiveness of the security instrument."
So does this mean they will or will not pursue any deficiency judgment or do this have nothing to do with a deficiency judgment. I have not received a 1099-c or anything else.
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David, that document simply cancels the trust deed/mortgage on the property, that they held, since the property has now been sold. It has nothing to do with pusuing a deficiency or not.
But, you need to read the Approval Letter you received, agreeing to the short sale. If it does not specifically waive the deficiency/agree not pursue the deficiency, then the bank has the right to pursue the deficiency. It doesn't mean they will, it only means they can. I assume this was not a HAFA, Fannie Mae or freddie mac short sale.
I'm not a CPA or attorney, but it is my understanding is that you are obligated to report the amount of forgiven debt, whether you receive a 1099 or not. Not saying I would, or wouldn't, talk to your CPA.
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That's what I am trying to get is the approval letter as my x did the SS and I cannot get it the letter, even if there is one. The bank loss mig. negotiator will not return my calls.
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Permalink Reply by Kathy Fuhriman on
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David, Have you called the real estate broker who handled the short sale? Certainly if your name was on the mortgage you have a right to the approval letter whether you had quit claimed the property to your ex or not. Call the realtor.
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Permalink Reply by Simon Campbell on
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If the lender does indeed waive the deficiency amount, you will not need to report the "income" on your taxes.
On January 1st, Congress signed the H.R. 8, the American Taxpayer Relief Act of 2012. The mortgage cancellation relief for home owners or sellers who have a portion of their mortgage debt forgiven by their lender, typically in a short sale, foreclosure sale or loan modification is extended through 2013.
Additionally, deductions for mortgage interest, mortgage insurance premiums and state and local property taxes are extended. The exclusion from capital gains with the cap at $500,000 ($250,000 for individuals) remains in effect (subject to limitations).
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David, were you an actual signor on the promissory note? This is different than being on the deed, and therefore having to be on the mortgage. Did you not have to sign? Talk to your/wife's real estate agent and find out who did the actual negotiation from your side. They will have the Approval Letter, and assuming you were a party to it, you can get it that way.
What state are you in? Was it a recourse loan?
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