what you need to know before walking away from your underwater property
DESCRIPTION
If you own property valued at less than the amount you owe on it, you are 'underwater' or 'upside down' Get the knowledge you need before just walking away.TRANSCRIPT
Law Office of Hilton M. Wiener
BEFORE Walking
Away From Underwater
Property
WHAT YOU NEED TO KNOW
Law Office of Hilton M. Wiener
DEFINITION: When the mortgage balance is greater than the value of the property
UNDERWATER OR UPSIDE DOWN PROPERTY
Law Office of Hilton M. Wiener
There are many different rules state by state
If not in a no-deficiency state, you remain personally liable for the loan balance
Will the lender pursue that claim?
ARE YOU IN A “NO-DEFICIENCY” STATE?
Law Office of Hilton M. Wiener
“A short sale is far preferable to simply walking away”
REALTORS SAY…
Law Office of Hilton M. Wiener
If not…
the only parties BENEFITTING from the short sale are the realtor and the buyer
TRUE: IF THE AGREEMENT CONTAINS AN EXPRESS WAIVER
OF DEFICIENCY
Law Office of Hilton M. Wiener
an attorney who fails to
negotiate a deficiency
waiver in a foreclosure
settlement…
is just as remiss as
the realtor who fails to
insist on its inclusion in a
short sale
GET A QUALIFIED AND KNOWLEGEABLE ATTORNEY
Law Office of Hilton M. Wiener
Thinking your problems are over... Think again about those
obligations that linger
HOA dues
Club dues
second mortgage or HELOC
tax liability for forgiveness of indebtedness upon receipt of a 1099-C
Thankfully, real estate taxes are rarely a personal obligation
OBLIGATIONS THAT LINGER AFTER THE OWNER LEAVES
Law Office of Hilton M. Wiener
Tax liability can be much more complicated (especially for real estate
investors)
A SHORT SALE DONE PROPERLY TIES UP THE LOOSE ENDS
Law Office of Hilton M. Wiener
Provides that the cancelled debt is not taxable for the owner of a primary residence
there is no such exclusion for owners of second homes or investment property
MORTGAGE FORGIVENESS DEBT RELIEF ACT
Law Office of Hilton M. Wiener
It requires the fi ling of Form 982
THERE IS AN INSOLVENCY EXCLUSION
Law Office of Hilton M. Wiener
relief from the 1099 income
is still possible
IF YOU ARE NOT INSOLVENT
Law Office of Hilton M. Wiener
Get more information on how we might help you save money on an investment gone wrong…
CALL 561-750-6672 NOWfor a complimentary consultation
CPA and Tax Attorney