Investment Property Short Sale - Tax and Deficiency Consequences - Forum

I live in a state where they can pursue deficiency so the investment properties I've seen have had deficiency language in it at approval time, however, I've kept in touch with the homeowners and so far nothing has been filed :)

California -
New Law

The new law follows the verbiage of §580d that “no judgment shall be rendered for any deficiency.” It contains several important limitations:

1. It applies only to the first mortgage or deed of trust.

2. It applies only to dwellings up to four units, but does not need to be owner-occupied nor purchase money.

3. It does NOT apply “if the trustor or mortgagor” commits either fraud with respect to the sale of, or waste with respect to, the real property. In these cases, “the holder of the deed of trust or mortgage” may still “seek damages and use existing rights and remedies against the trustor or mortgagor or any third party for fraud or waste.”

4. It also does not apply “if the trustor or mortgagor is a corporation or political subdivision of the state.” (I will only discuss private borrowers

I follow this blog and it was posted this week: http://californiashortsalelawyer.com/2010/11/california-short-sale-...

Replies

Smitty November 19, 2010 at 9:14am

I live in a state where they can pursue deficiency so the investment properties I've seen have had deficiency language in it at approval time, however, I've kept in touch with the homeowners and so far nothing has been filed :)

California -
New Law

The new law follows the verbiage of §580d that “no judgment shall be rendered for any deficiency.” It contains several important limitations:

1. It applies only to the first mortgage or deed of trust.

2. It applies only to dwellings up to four units, but does not need to be owner-occupied nor purchase money.

3. It does NOT apply “if the trustor or mortgagor” commits either fraud with respect to the sale of, or waste with respect to, the real property. In these cases, “the holder of the deed of trust or mortgage” may still “seek damages and use existing rights and remedies against the trustor or mortgagor or any third party for fraud or waste.”

4. It also does not apply “if the trustor or mortgagor is a corporation or political subdivision of the state.” (I will only discuss private borrowers

I follow this blog and it was posted this week: http://californiashortsalelawyer.com/2010/11/california-short-sale-...
Jeff Payne November 17, 2010 at 9:49am

I have done many of them..... all that I have done have recieved a 1099C. Most of my sellers have reported that their CPA was helpful in reducing or eliminating their tax liablility from the 1099C. I am in Florida BTW

This reply was deleted.