Hi everyone! I need some advice and at this point I don't know where do turn, even my lawyer is no help! I got myself into a bad situation ( long story so if you want to know just let me know and I can fill you in) Anyway short version I bought a house to help some people out and got screwed over. They were not paying me the mortagage payments and I could not afford it. After almost a year they were finally out of the house and the bank agreed to a short sale before it went into foreclosure. The short sale amount was quite a bit less than the mortgage but my lawyer said they wanted a letter explaining everything that had happened and from reading that they approved the short sale. The short sale took place a few weeks ago, which was after the time the bank said it had to be done by. They still allowed it.

My question is I was under the impression that the debt was wiped out but now, after the fact I am finding out otherwise, that I might have to pay what is owed. Defeciacy judgement I think? I just don't know what to do I can not afford it and I would like to talk to the bank to get a better understanding of what is going on but the sale is still pending and I was told it might not go through for another 60-90 days. I just want to know what is going on so I can understand. When I call the bank they are still not showing the sale.. and my lawyer is absolutely no help.

Any advice is greatly appreciated, thank you so much.

You might check this: Short Sale in Real Estate - How to Handle a Real Estate Short Sale (http://homebuying.about.com/od/4closureshortsales/a/shortsalebasics.htm)

As I understand it, a short sale means that the lender "forgives" the balance. This means you won't be required to pay it, but it may be listed as income which you will have to pay taxes on. If so, you will get a 1099 for the amount next year.

It was also my understanding that legislation signed earlier this year limited the consequences of a short sale.