WELLS FARGO-Seller informed a 1099C wont be issued?...it was his Primary Residence..MI Issue?

I was recently approached by a past client who informed me that the short sale of his primary residence in 2012 was not going to receive a 1099C from Wells Fargo..BTW-this was a Fannie Mae backed loan.

Apparently Wells Fargo informed him this was due to some issue with private mortgage insurance (Genworth) on his loan? The Approval Letter simply addresses the terms of acceptance- nothing regarding the 1099c filing (not unusual)..It seems to me that the completion of the short sale requires filing the 1099C by W/Fargo with the IRS regardless of PMI..Am I off on this position?

I've never heard of this happening unless the home was an investment property..Have any of you experienced this? As this was a F/Mae loan- is there any recourse against the servicer?? Any advice as to how to correct this with Wells Fargo would be appreciated.


Thanks in advance, I truly appreciate your feedback on this..


Views: 616

Reply to This

Replies to This Discussion

I wouldn't touch this issue.  Advise your Client to seek a qualified Accountant or Tax Attorney if this is a concern to them.

Your assessment is a given from the start, we encourage our clients seek appropriate legal/tax advice.. but I appreciate your response Kevin...

Are 1099s an Illusion?

As a short reminder, the big deal about 1099's is really an illusion. 1099 or no 1099, if the debt is forgiven the borrower has income to report to the IRS. No exceptions! Too many people come to me and say they want me to negotiate with the lender so that they don't get a 1099. I ask them why? They tell me that if they don't get a 1099, they don't have to report the income they would get on the debt they did not pay. The next question is why does the bank get to decide what the IRS usually has jurisdiction to decide? The answer is of course that the lender giving a 1099 means squat - unless the borrower is intent on committing criminal tax fraud by not reporting income. There is relief available to the borrower through two opportunities to not recognize up to all of the income. These are discussed in detail in my article called (see link) Sellers Always Have Income and include the 2007 Mortgage Debt Relief Act.  If you think you can avoid the income tax attendant to non-exempt tax payers, remember Leona Hemsley's profound statement that, "income taxes are for little people".  If you are of the same opinion, you run a very big risk of being caught for income tax reporting fraud.

Hi Ron,

Thank you everyone...I like this analogy and it makes sense. I appreciate everyone's input on this inquiry.




© 2024   Created by Short Sale Superstars LLC.   Powered by

Badges  |  Report an Issue  |  Terms of Service

********************************** like buttons ************************