Loan Forgiven in the middle of a foreclosure???

[Catia]

Frogge, don't comfuse what bnkrptcylwr is talking about with the Mortgage Forgiveness tax break(HR Bill)--just in case, I wanted to clarify, they are 2 different things entirely. One is dependent upon the residence being your primeary residence--the other is not.

bnkrptcyLwyr--If you have read everything I have written in this post, and you are in fact a lawyer, then you most of all should understand the power of the document I do have.
I have the document which not only was in fact signed by the VP of the Mortgage Co, but then NOTARIZED--And then it was REGISTERED with my county--then PROOF of it being registered to my county was returned via receipted mail and documented to the mortgage company!!!...

My document is not recindable...As far as I have been advised. It was the recorder of Deeds who explained that this document is not recindable even if in error--I was told they'd have to sue me personally if they found it was in error, but could not just re-attach my property--And the fact that he could find no real proof of the mortgage being properly registered in the 1st place --From how I understand it, from how he explained it, this is mortgage that "didn't exist" as far as the county is concerned--THE MORTGAGE WAS NEVER RECORDED PROPERLY, NEVER RECORDED AT ALL--but it WAS ALSO REGISTERED AS SATISFIED--It is a double whammy--they'd have to PROVE THE MORTGAGE EXISTED in the 1st place--and they CANNOT because the county has no documentation of it ever being registered.

I really do not need ANYTHING from this mortgage company to give me comfort!!! My trip to the county court house and prothonotary and register of deeds and real estate dept all agrees on the satisfaction--

All this company had done since day 1 is harass me, even all of the time I was on time with my payments--for 2 1/2 yrs, they have called every day, from the 1st of the month to the 15th of the month, sometimes several times per day...they sent people to my house--this is even when my pymt was alreadt in, cashed--Then they tried to bill me 10.35 for each time they sent someone to my house--I'd fight with them over these charges, have to send bank statements proving they cashed my check days before they sent someone to my door--and still--they'd report me late every month to the credit bureaus, destroying my credit--it was never ending.

I did make a post explaining this, but for some reason, it did not end up in this thread yesterday...

Anyway, no, the massive tax burdon that is about to hit me in April is gonna be awful. I can't afford to even attempt to sell the house for a lousy 15k fast because that will up my taxes even more...There is also question of whether they can IN FACT "discharge" or "forgive" a non-existant mortgage--if they did not properly register it, they may NOT be allowed to 1099-C me for a "forgiven debt" if the debt did not exist-in reality-this is what I need and will be discussing with an attorney.
I have health issues (MS)and am partially disabled some of the time, I am now low income--this also prevents me from doing what I needed to do with BK...it skrews me royally.
There is also another angle that might relieve some of the tax burdon, which is the HR mort forgiveness debt relief act--This home WAS my primary residence for the the past 4 1/2 yrs out of 5--and much of the refi $$ went to repairs and remodeling of this home, and I have ALL receipts.

Also, I was insolvent at the time this occurred, but I was not in BK, I was saving for a BK attorney-- so there is some question of proof on insolvency--but I might be able to satisfy that as well...

This loan servicer/company does not even pay a human being to fill a position called "support department"--inquiries are NOT answered by phone--only by FAX or snail mail...What kind of company is this??? Not one I would ever choose to do business with. They bought the loan through Ameriquest--Ameriquest probably dumped it because they knew they skrewed up--who knows--they are all scheisters.

Precisely because of their refusal to adequately answer my inquiries, I went to the county--which holds the most important document--
This mortgage company could send me 10 mortgage satisfaction papers--but if not properly registered--they mean NOTHING and CAN be recinded as "error"...I have a copy of the one that matters--IN COURT...

[Catia]

Just wanted to note something else lol...cuz i re-read my last post--I did fax them a request for info--to their "human-being-less" department called "support department".
What I meant about not needing "comfort" in getting a response to them wasn't meant to be a smart-a** remark--It was meant more in a way that--I have no faith that I will get any response--this company servicing, and/or possibly owning my loan is so skrewed up, they could never get anything right in the 1st place--from the time they took the loan.
From trying to force to to take their overpriced Homes owner's policy, and BILLING me for it when I had an awesome and paid for policy of my own that was PAID OUT OF MY ESCROW--they did all kinds of crooked stuff--paid taxes late too--and charged ME the delinquency for it when I HAD the $$ in escrow--so many things they did wrong--because they said they did not have my info????--and this was 6 months or more after the started servicing my loan--They have never answered 1 question straight--not one. So ANY correspondence I would receive from them would give little comfort.
Also, this past week, I have read online of other's who have had the same types of problems with this loan company...
I have also read that loan companies are reviewing loan docs for fraudulent info and that some are just simply forgiving as opposed to being sued for fraudulant practices in court--Maybe media attention to their practices are making them think twice--I don't know--but this is surely odd none the less.

[AngelinaCatHub]

Question relating to this subject: So a house worth 74K declines to 26K. A 1099 issued for the “forgiven” amount. What about capital loss? Can that be applied to this devaluation to offset the so called ‘income’? ‘Hub

[Faithfullymovin]

Caita:

Is the loan company your talking about Litton Loan Service? I have heard they are awful to deal with and I am fixing to have to deal with them.

Faith

[Catia]

Ok, this situation could NOT possibly get any WEIRDER-
-but ---------IN FACT IT HAS!!!!!!

I just got home from work, and in the mailbox is a letter from the loan company/servicer---Another letter telling me that I am PAID IN FULL (emphasis theirs in bold print)--then -
--get this---
Enclosed in the envelope are MY ORIGINAL MORTGAGE DOCS which were signed by me!!!!!!!!
UM????
These are NOT the copies--they are the originals--And they are the originals that the lender is supposed to keep---I have my originals...

All I can say is WTF ???

What is going on???


I have never received my original ANYTHING back when I have paid off property in the past--just the satisfaction papers, and the county info.

SURREAL--Apparently this is a done deal cuz I now hold the ORIGINAL lender's copy of the mortgage with my signature in blue ink...dated and all...

I have NO IDEA what is going on--except that my house is paid for, has no leins and is free and clear of EVERYTHING--

Angelina--no the company is not Litleton, but when I do searches on my info, I come up with a lot of Littleton stuff.--I still do not know who owned the loan to this day.

[lrprn]

What is going on???

Sounds to me like you own a house free and clear. Now just go make sure the title reflects that too.

[Catia]

The saying "If it seems too good to be true, it is" keeps me from believing fully what is going on.

Here is what I was told by my dear friend who is an attorney and a business law ethics professor --He says the loan company must be running for cover--he said several loan companies are under the microscope for fraudulent practices, and apparently ALL of the companies that have been players in my loan are under close scrutiny.--He said they may well have known fraudulent things in my loan that I did not, but they are covering their butts...

We expect to see this company involved in a class action lawsuit, because I doubt I am the only one who has had this happen--most people would just take the papers and run...

I really don't know--but his theory makes more sense than anything I can come up with.

We shall see if I receive a 1099-c...I bel;ieve I will get one, he doubts I will get one, because that would mean they would have to report to the IRS--He believes they are covering up something big--like several loans like mine...maybe several hundred. Recently the head of the loan company was indicted--looking at up to 105 yrs...

The mort/loan servicer will not tell me. At the ens of the year, I will check to see ALL info sent to the IRS BEFORE I file my taxes.

Luckily for me, I am insolvent, so my tax burdon won't be as bad as I thought-

-I NEVER thought I would ever say "Luckily I am insolvent"...But there it is.

Fact is, I gave up months ago, and decided I did not want to even be bothered with this house nor the loan company any more, I was too far in debt, and have health issues, & was saving for ch 7 bk, and was going to surrender the house in BK if it was not foreclosed upon yet.

Will be getting a new title insurance policy ASAP, to cover my a**, which means as soon as I can come up with the $$$---hopefully before the end of the month--
Now I am the opportunist...
never was one before, but after this past year, well...things have changed. I'm keeping mine.

This by no means makes my problems go away--but i might be able to dig out without filing BK.
I already have someone to move into the house--for WAY cheap--just enough to cover my taxes and INS--so that the house is not vacant since i am apparently stuck with it.

[Catia]

BigBoy2u-----
I do not have to estimate or guesstimate anything.
Yes, lots of companies do not ever get the copies to the customer--BUT THEY GET THEM TO THE IRS-otherwise they can't write it off-

I don't need a special connection to the IRS, just the toll free # needs called after 2/1/09--by law the IRS needs copies--if I did not get mine--they will have their copy--this is how you get your copies if one was lost-and the other party won't cooperate on their taxes!!!
Call the IRS---it's simple and fast--this goes for w2's and bank interest statements, stock statements etc--you can get all of those directly from the IRS, and they are more than happy to send them.
The worst possible thing one could do is to "guesstimate"--that'd get you flagged for audit for sure--if you don't get your tax docs to file--call the IRS, they will send them, if they don't have them yet, file for an extension--because the comapany MUST BY LAW submit your 1099's, or w2's or whatever other income statement under panalty of law--don't sweat it--if they won't work with you--let the IRS work on them--piece of cake to get results then!!!
Been there, done it, several times!--One call to the IRS--POOF!!! every income statement I needed within a week!!!

Oh ya, by the way--every single fee they ever charged me mysteriously DISAPPEARED INTO THIN AIR--they credited every ridiculous fee in the past year and 1/2--not kidding--I think they don't want sued--I am starting to believe they are in hot water due to their own devices.

[Catia]

Well, whatever this loan company IS doing, I have no idea.
They signed and notarized all docs to the county so far, and they did so very quickly.

Just a note to those of you reading this--this might sound like I got off 'easy'--fact is, I had to move out of that house, my whole life was sent into an upheaval, it has not been an easy road.

Only thing I can say is that I am covered whether they send a 1099-c or not--because i AM insolvent (was insolvent at the time the satisfaction took place)--So even if I did not fall elligible for the HR Mort Debt Relief Act, I AM elligable to claim insolvency, even though I was not yet in BK.


Has anyone here ever received the LENDER'S copies of their Mortgage docs back when satisfying a mortgage? I never have--this is something I find really weird. I am wondering WHY they sent these to me.

Last year I asked who owned my loan, and they refused to tell me--they said it was none of my concern, and that they weren't obligated to disclose that info to me-they said they were the 'servicer', and that was all I needed to know--I argued with them about this fact-If I am paying someone I have a right to know WHO is receiving the $$-so I demanded they send me proof of the note.--They did NOT-
-But now--I have the original proof of the note with my signature...

Thoughts???

[timetosave]

house sells for $1

WELL, being that it cost this bank $10,000 to sell this foreclosure for $1, I think that your bank knew exactly what they were doing! And it definitely was NOT a mistake!

http://www.detnews.com/apps/pbcs.dll/article?AID=/20080813/METRO/808130360/&imw=Y

[Catia]

amazing article...too bad detroit is so bad now--talk about an investors haven--one could own the entire city...but i'm just not that tough!

Anyway, I wanted to mention, i tried for a year to verify who held/owned my note...I tried the MERS system, which apparently MOST legitimate lenders use--nothing in MERS system on me, or my mortgage note.

Also, on the original the loan servicer just sent to me --it is stamped "Pay to __________________ without recourse", then the loan company name, their president sig, and ceo sig.--this is the original doc-but this part was ink stamped-what does/did this mean???

BTW I did look it up here, but was left with my head humminghttp://www.answers.com/topic/without-recourse

[Catia]

...OK, now I fullt get the headache that comes with my situation--this isn't "forgiveness" like as in "you are forgiven"--this is getting skrewed...

If I had already filed BK, this would be an even bigger mess.

I told them last year I was "in the process of considering BK"--but was still trying to sell the property.

I still think a bunch of fraudulent stuff went on on the lenders end, but I do not know what.
I just know their practices of harassing me while I was paying on time in full every month were ridiculous, and nothing I did stopped them--
Nothing stopped them from calling every day during my grace period--AND also from coming to my front door--these visits occurred no less than 5 time in 2 years even after they had cashed my ON TIME checks...Then they CHARGED me for such visits...

I expect more lenders will be forgiving upsideown houses in the future--they get a tax write-off, plus save the legal fees of having to foreclose...Basically, if the loan in not in the 6 figures, it is cheaper for them to forgive than to foreclose--you may be stuck paying some, or all if you are not insolvent, or do not fall under criteria for the HR bill...And, you are stuck with the house--if you were in foreclosure, and had already moved...well, this is quite the pickle--now I am stuck with the house, the ins, taxes, etc etc while trying to sell, plus I gotta get a good tax accountant to handle my taxes--which is $$ I do not have. UGH.

Now I can't really file BK, there's no one trying to foreclose on the house anymore---it'd be an asset case, and I fall in a weird area. BK now would really skrew me up more than help me. It would appear I have more assets than debts--sort of like being "land-rich" but really this is not so.

I can't figure out how to get a "fresh start"--this is a weird place to be--Ideas anyone???


I am also concerned because the lender forgave the full amount of the loan. I did have about 3 yrs of pymts in, with interest, maybe not enough for any real equity, but I did pay them--I am not sure how to proceed, as I have not head from the lender as to how I will be 1099'd--

How long by law do I have to wait for a 1099--do I have a right to know BEFORE tax time how much they will be claiming they 'forgave'??? Who knows this info???
Is there an agency I can contact???

Also, how is a forgiven debt listed on your credit???

Since there is no HUMAN BEING (their words verbatim)in their "Support Department", all I can do is ask questions by QWR (qualified written request)--this must be done by fax or snail mail--it is a lengthy process.
Each QWR received (and they are the ones who say whether or not it is received, and when)--they say they have 60 days to respond, then if all questions are not answered and I have more questions, it starts over...UGH...
I am trying to figure out what to prepare for in advance of tax time--do I have a right to that info???
Anyone?

I am sure somewhere there is a way to figure this out--and the people here seem to have more info than anyone else I've attempted to speak with. I am still saving for an Atty, but now I will need also a tax accountant to sort this out, so I am stuck for now it seems.

(edited to try to correct the typos)

[Catia]

response cut/paste from another thread, as I should've asked my questions here.
response from HHM:

As has already been stated, your personal liability can be forgiven while the lien survives. However, if the mortgage company "recorded" a satisfaction of mortgage and their are no other liens, mortgages, or deed of trusts in effect, you better jump all over it. Sell the house, or whatever, before someone figures it out. The law is on your side here as there are almost no defenses that bank has if you sell the house after the Bank recorded the Satisfaction. The purpose of having a county recorder is really to protect buyers (not so much sellers). If the buyer does their due diligence and checks for recordings against the property, and those recordings show no other interests in the property, the buyer becomes a bona fide good faith purchaser and no one can undue that deal.

As for your personal liability, if you received a 1099-c, that is a defense to any subsequent attempt to collect the debt against you personally.




HHM--I believe you are spot on with your advice to get rid of the property ASAP, and I intend to do this, but have no buyer...

I do not know how the lender will respond, whether or not I will actually get a 1099-c. I KNOW I should get something--that doesn't mean the lender will do what they are supposed to--
I am 'assuming I will get a 1099-c' for about 60k.

I will need to prove insolvency to IRS to avoid a massive tax bill.

I do not believe I am elligible for the "mort debt forgiveness', so insolvency seems the easier solution. (though i'm not positive about this and am still awaiting an answer)

I am concerned if I did get a buyer this year that the sale, even if cheap (say 10-15k)--would jeopardize my ability to claim insolvency for 2008--meaning big taxes, of which I cannot afford.

Does this thinking make any sense?
I was insolvent before the discharge/forgiveness of my mortgage in 07/08--I CAN prove this--but after the forgiveness, I'm not insolvent--so if I sold in the same year--could it cause issues?
Any clue or guidance?
I know you're not a tax guy lol