My clients want to do a short sale. Their mortgage was with Chase, but then transferred to Ocwen. The balance is $190K, and they have stopped making payments on it several months ago. They also have a home equity line of credit for $35K, which is with Chase. They last paid it in Dec. 2013.
What is your experience with Chase taking a short on the home equity line of credit?
What are you doing if your clients say they cannot afford to meet with an attorney, or a tax advisor, regarding the impact of the mortgage debt forgiveness relief act not being renewed?
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I've found out that the sellers have done a $40K cash out refi in '05, plus a home equity line of credit for $40K. Now they want to do a short sale. If they won't consult with an attorney first, am I wrong to help them pursue a short sale?
Have a disclosure that you urge them to seek professional advice, and that the short sale Will likely result in a taxable event for them.. But one thing for sure, the cash out refi isn't covered by the MDRA anyway, and if the equity line was the same (not for improvements to the home) it wouldn't be covered either. So, the MDRA may not be as important to them.
You can print out or point them to the IRS website which discusses it, and form 982, but I wouldn't draw any conclusions for them. And of course whether it will get extended or not is still up in the air.