Sub Prime Mortgage Troubles

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Sub Prime Mortgage Troubles

If you have a mortgage and are having trouble keeping up with the payments?
If you’re falling behind on your mortgage it’s important to get a plan to gather quickly and act on it. It’s easy to feel overwhelmed and afraid. But waiting too long can cost your home.

Many good, hardworking, honest people lose their home to foreclose and one of the main reasons is that they simply refuse to acknowledge that they are in trouble. They keep waiting or hoping for a solution to bail them out, and it doesn’t. If you’re in trouble, work on a solution now!

How the foreclosure works depends on which state you live in, and can take a very short time or as long as a year and a half.

If you do lose your home to foreclosure, and the foreclosing lender gets less than is owed (plus expenses) from the sale, there is a deficiency. For example, if you owed $100,000 on your mortgage and the lender incurred $7,000 in expenses foreclosing and selling the property, then received only $90,000 in the sale, there is a deficiency of $17,000. ($100,000 + $7,000 - $90,000). If there is a deficiency, you may face two nasty surprises.

The lender may have to report this “forgiven” amount to the IRS on a 1099-C, and you’ll be expected to pay taxes on it as if it were income to you. If that’s the case, make sure you talk with a tax advisor who may be able to help you wipe out that tax debt if you are insolvent.
The lender may sue you for the deficiency, the difference between what you owed plus expenses and what they received in the sale of the property. That means that you may still have a lender trying to collect form even after the foreclosure.

If you had a second loan or other liens on the property, and the lender with the first mortgage foreclosure. The important exception is tax liens, which must be paid before the property can be sold again.

So it’s often better to avoid foreclosure if you can, you can find the article “Strategies To Avoid Foreclosure” in this blog.

Source: The ABC’s of getting out of debt - Sutton, Garrett



Sub Prime Mortgage Troubles

Avoid Bankruptcy and Free Your Debt . Get Refinance Loans , Secured Debt Consolidation or Debt Settlement Advices.