bankruptcy escrow account
we do not want our house the value has dropped 100k in 1 year who will buy? we are way upside down. help?
when we first purchased our home 2 years ago, (so. cal) the houses were far and few (in our area). Now we have lost over 100k in value, we are so upside down, can’t afford the payments, there are so many houses for sale how can we compair to sell ours. we have a second mortgage, the title company didn’t figure the correct taxes at signing of papers, now 18 months later they notice our escrow account is 9k in the whole which raised our payments dramatically, we are at our witts end. I have been reading other questions and trying to get answers, but all have different issues, all we want is to walk away so if it’s foreclosure, short sale, bankruptcy, giving it back, don’t know who to turn to first. can anyone give honest suggestions, will banks sell your home for nothing so they can sue you for the rest? just curious or will they get all they can? Thanks
In California, you would probably not undergo a judicial foreclosure, but rather a non-judicial foreclosure. In a non-judicial foreclosure, the lender has no further recourse against you to recover the deficiency in your mortgage after sale of the property.
HOWEVER, lenders in California generally DO issue you a Form 1099 for the deficiency amount after foreclosure, which will require you to claim the deficiency amount as ordinary income in the current tax year. If you’re $100K upside down, prepare for your taxable income to rise by that amount or more.
