Posted by dave on December 26, 2007 at 16:46:15:
Talk about tyranny Our government taxing income u never received. “Phantom income”. With rules like these the living in the former Soviet Union sounds less ruthless.
What happens after Foreclosure? D/J or Ganishment? - Posted by REG/VA
Posted by REG/VA on October 12, 2007 at 17:29:32:
What actually can happens when a property that is in foreclosure goes to sale at auction and is either brought by someone or given back to the lender.
Lets say the property has an 80/20 loan and it goes back to the lender. What then?
Or bought by someone at auction for less than what was owed.
What happens with the remaining balanced owed…and what happens to the second mortgage?
Does the first and second lender pursue granishment?
What can the lenders do and how fast does it happen?
If any of you seasoned investors or moderators have an answer it would be greatly appreciated.
REG/VA
Re: What happens after Foreclosure?? - Posted by craig newman
Posted by craig newman on January 24, 2008 at 17:12:52:
What happens to the second mortgage after the home was sold?
Post foreclosure happenings. - Posted by John Merchant
Posted by John Merchant on October 23, 2007 at 09:45:42:
Garnishment is known as “extraordinary” legal remedy and as such, it has some specific rules for its use.
Normally it can be used PRE judgment only with bond and substantial costs being paid upfront, like injunction action…so its pretty rare that any creditor goes to the trouble to file pre-judgment.
After a judgment it requires no bond so that’s when it’s usually used and then only if the creditor thinks it knows where you have bank accounts.
While I don’t know if Deficiency J is allowed on residential D/T in VA, if the lender’s loss is significant enough, it might pursue one against you.
But you should prepare to deal with the IRS as I believe that the tax rule is you have a gain for the “forgiven” debt that you no longer have to pay.
And for this reason it’d make sense right now to go pay a good tax lawyer or accountant to work with you to reduce that tax on “phantom income” before the IRS lands on you.