What are the tax consequences of a foreclosure, short sale or loan modification?

Yesterday the IRS paid a visit to our office to verify some information.  Everything was OK but it got me thinking.  What does the IRS say about the tax consequences in real estate transactions in regards to distressed situations.  This is a common question from clients.
Let’s see what the IRS has to say:
The Mortgage Forgiveness Debt Relief Act of [...]

FTC ban on upfront loan mod fees looming

On March 29, 2010 the loan modification realm is likely to see massive changes.  It appears that the FTC’s proposed ban on upfront loan mod fees will soon be in effect.
This is good and bad.
The good news is that hopefully most of the rip-off operations available through the internet will be out of business.  It [...]

Fremont and Wells Fargo Reach $7M Settlement

Bankrupt mortgage lender Fremont General Corp. and Wells Fargo & Co. have reached a nearly $7 million settlement in repurchase disputes stemming from the bank’s role as trustee to several of Fremont’s mortgage securitization transactions.
The case can be viewed by pulling from Judge Erithe A. Smith of the U.S. Bankruptcy Court for the Central District [...]

Midland Mortgage grants 37.5% reduction in rate for homeowner

Loan modifications offered through HAMP can be beneficial for some homeowners but if the homeowner is denied for HAMP or the offer is unacceptable, litigation may be an option.  This is a more costly alternative but in most cases results in more beneficial and permanent modifications.
Recently we helped homeowners with legitimate hardships due to medical conditions negotiate a settlement with Midland [...]

Why you keep ‘Chase’-ing your loan mod

This reporter does a good job at noting some of the more frustrating problems with securing a loan modification with JP Morgan Chase.    These kind of ambiguous and weak answers are a regular part of almost every client stpry who that walks through our doors.

Home owners are so exasperated by the entire process that many [...]

Modification is Not for Every Borrower according to a Treasury Adviser

Two questions borrowers frequently ask us,

“How did my neighbor get into HAMP (and/or get a loan modification) but I can’t?
“Do I have to be delinquent to get a workout plan?”

The best answers typically are:

The secret Black Box recipe may not mix well with your situation (read more here on this) because your loan may be [...]

Mind the P&L, as in Payoffs and Liens

This is a re-print of an article I wrote for Real Estate Executive Magazine for this month’s issue.
Mind the P&L, as in Payoffs and Liens
Understanding your seller’s complete financial picture has long been a best practice of top producing REALTORS but that task has become more important and more complicated.  It’s not just declining [...]

HAMP’s secret formula in a black box = black hole for homeowners

This is from a rather long article posted by MSNBC.  Here’s a quick summary of some of the more salient points. So much for full transparency from the U.S. Government.
Flaws plague foreclosure relief program
Millions of Americans who are struggling to save their homes from foreclosure are trapped in a labyrinth of disappointment and [...]

Can I trust my mortgage company?

The simple answer is – If it’s not in writing it, NO.
If you have a repayment plan, modification or foreclosure postponement offer get it in writing.  Demanding you agree to an over the phone, verbal agreement is likely worthless and in my opinion proves that they aren’t willing to send it to you in writing.
Does [...]

Bank of America’s Loan Mod raises payment 193%!!

Bank of America Loan Modification