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    tb7677's Avatar
    tb7677 Posts: 9, Reputation: 1
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    #1

    Mar 2, 2008, 06:45 AM
    Foreclosure OR deed the property back to the bank
    Ok I did some reading and there was law passed that states the IRS will not tax you on Phantom income or the difference in what you owe the bank and what your house was sold for in Foreclosure. So what should someone do facing foreclosure?? Allow the home to go into foreclosure or Deed the property back to the bank??
    Fr_Chuck's Avatar
    Fr_Chuck Posts: 81,301, Reputation: 7692
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    #2

    Mar 2, 2008, 07:06 AM
    Well do you want a foreclosure to be on your credit report, or not ?

    Some banks will allow a deed instead of foreclosures, others will not, some will allow a short sale, others will not.

    IF you know you are going to be foreclosed it is better if they accept the deed back, you don't owe them the difference.
    tb7677's Avatar
    tb7677 Posts: 9, Reputation: 1
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    #3

    Mar 2, 2008, 09:02 AM
    Well I don't know for sure if they plan on me paying the difference or not. All I know is they asked how long the property has been for sale, over 90 days, etc, etc. I don't know the final details other than they proposed that I can deed the property back to them.

    But if they sale the property for some stupid low ball amount and come back to me saying I owe them 50K or something then I would rather take the foreclosure or a BK before I have to try and pay them back 50K or whatever amount. Also according to the new laws if I foreclose I am not liable for any amount of money that is not recuperated after the auction of the home.
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