mortgage loan modification

Tax on 1099C, Cancellation of Debt Income; Short Sale, Loan Modification & Foreclosure. Exception; Mortgage Forgiveness Debt Relief Act, Bankruptcy & Insolvency. Go To http://RealEstateMarketingThisWeek.com

Cancellation of debt income reported to the IRS on form 1099 C

So we talked about 20 million homeowners are upside down on their mortgages, thousands of their homes are being foreclosed on every week, property values may still be declining in some areas. Homeowners are walking away, they are doing foreclosures, there is a deed in lieu that people may not be aware of, loan modifications in many different shapes, forms and fashions and short sales.

These are all things that do have tax implications that a lot of people are not aware of. Each has its own consequences thats why we have asked Mike Patenella, a CPA to be with us today on the air. Mike tells a little bit about yourself.

Well I am a CPA. I have been in public accounting since 1988, I have my own tax practice and operate out of Scottsdale, and we focus on tax-preparation, advance planning for high net worth individuals and small businesses throughout the Valley. I moved to the Valley in 1990 back from New York.

You know, I have had the opportunity to work with Mike as a strategic partner as well and I share a number of clients. Each time I have had the honor of providing him a referral for tax work the outcome has exceeded expectations, so I am really pleased to be part of the discussions today and to work with such a great group.

It has been a pleasure, and again if you’re talking about that strategic partnership, the financial power team, as our good friend Dan Havey likes to call it, the outcome is important, but when a client calls you up or a homeowner calls you up and says thank you so much for sending me to Brett or Mike, what a great job, wow. Thats the greatest, again Mike thats why youre here with us today

So we should probably dive right in. I know we’ve been talking a lot the last few weeks about loan modifications and how Velocity Financial can help in that regard. But, help me out, even for my financial planning perspective what are some of the implications of taking this approach. For example how does the IRS look at people who don’t pay back their debt?

Well they do have a record of who does not pay back their debt because the banks have to send a form 1099C to anyone who gets any debt forgiven and what that does is it lists how much debt youre able to walk away from. And the reason they want to track that is unless you qualify under certain exclusions that is taxable income to you.

A question for you on that and I honestly don’t know for sure the answer to this, so let’s use a simple scenario, my favorite one is a guy owes $400,000 on his house and he does a short sale for $300,000. A laymen would think that there is going to be $100,000 he is going to get a 1099C for, a 1099C form from the lender that they didnt pay the moneys back for. What about the other cost the lender incurred? For instance even though they sold it for $300,000 there are still real estate commissions, title, deeds all kinds of closing costs, and things like that, that the lender loses below that 300. Do you know if thats included?

Yes that would be almost like lending you additional money to cover those costs.

So in other words if I owe $400,000 and sell it for $300,000 in a short sale, the bank is going to spend $112,000 I saw in a report today, youre getting a 1099C for that right?

In that example yes

The foreclosure cost, I just read today, the average foreclosure costs $112,000, average cost, thats legal fees, carrying cost, all these different things. Thats a lot of 1099C income.

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Tax on 1099C, Cancellation of Debt Income; Short Sale, Loan Modification & Foreclosure. Exception; Mortgage Forgiveness Debt Relief Act, Bankruptcy & Insolvency. Go To http://RealEstateMarketingThisWeek.com

Cancellation of debt income reported to the IRS on form 1099 C

So we talked about 20 million homeowners are upside down on their mortgages, thousands of their homes are being foreclosed on every week, property values may still be declining in some areas. Homeowners are walking away, they are doing foreclosures, there is a deed in lieu that people may not be aware of, loan modifications in many different shapes, forms and fashions and short sales.

These are all things that do have tax implications that a lot of people are not aware of. Each has its own consequences thats why we have asked Mike Patenella, a CPA to be with us today on the air. Mike tells a little bit about yourself.

Well I am a CPA. I have been in public accounting since 1988, I have my own tax practice and operate out of Scottsdale, and we focus on tax-preparation, advance planning for high net worth individuals and small businesses throughout the Valley. I moved to the Valley in 1990 back from New York.

You know, I have had the opportunity to work with Mike as a strategic partner as well and I share a number of clients. Each time I have had the honor of providing him a referral for tax work the outcome has exceeded expectations, so I am really pleased to be part of the discussions today and to work with such a great group.

It has been a pleasure, and again if you’re talking about that strategic partnership, the financial power team, as our good friend Dan Havey likes to call it, the outcome is important, but when a client calls you up or a homeowner calls you up and says thank you so much for sending me to Brett or Mike, what a great job, wow. Thats the greatest, again Mike thats why youre here with us today

So we should probably dive right in. I know we’ve been talking a lot the last few weeks about loan modifications and how Velocity Financial can help in that regard. But, help me out, even for my financial planning perspective what are some of the implications of taking this approach. For example how does the IRS look at people who don’t pay back their debt?

Well they do have a record of who does not pay back their debt because the banks have to send a form 1099C to anyone who gets any debt forgiven and what that does is it lists how much debt youre able to walk away from. And the reason they want to track that is unless you qualify under certain exclusions that is taxable income to you.

A question for you on that and I honestly don’t know for sure the answer to this, so let’s use a simple scenario, my favorite one is a guy owes $400,000 on his house and he does a short sale for $300,000. A laymen would think that there is going to be $100,000 he is going to get a 1099C for, a 1099C form from the lender that they didnt pay the moneys back for. What about the other cost the lender incurred? For instance even though they sold it for $300,000 there are still real estate commissions, title, deeds all kinds of closing costs, and things like that, that the lender loses below that 300. Do you know if thats included?

Yes that would be almost like lending you additional money to cover those costs.

So in other words if I owe $400,000 and sell it for $300,000 in a short sale, the bank is going to spend $112,000 I saw in a report today, youre getting a 1099C for that right?

In that example yes

The foreclosure cost, I just read today, the average foreclosure costs $112,000, average cost, thats legal fees, carrying cost, all these different things. Thats a lot of 1099C income.

Duration : 0:6:23

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My application was denied because they said I have to make more than 1.5% of my existing loan balance. My loan balance is over $377,000 and I do not make more than $5,665/month. Is this correct? If I made that much I would afford my loan payments…. This is the Obama Making Home Affordable modification program. So frustrating…was trying to avoid foreclosure.

You’ll need to call your lender and VERIFY why your loan mod was denied. If they give you a difficult time, hang up and call again! Sounds odd, but it usually works! Depending on who your lender is, the customer service number you call is re-directed to different parts of the country. The 1.5% doesn’t make any sense so you’ll need to get straight answers from them. Lenders, depending on who the underlying investor is, will typically try to modify your loan down to where your debt-to-income ratio (DTI) is around 31% (divide your principal, interest, taxes and insurance (PITI) by your gross income and this will give you your DTI). Re-submit your loan modification package, if necessary and be persistent! Often times the person answering the phone won’t be updated or even educated on their employers’ loan mod programs.

Unless your lender is giving you the run around or they’re a small servicing company, there’s very little reason why they wouldn’t modify your loan if you have a legitimate financial hardship - which I’m assuming is the case since they accepted your mod application to begin with. If you were trying to do it yourself, consider calling HUD’s free loan modification service at (800) 569-4287 and see if they can help you. Once you submit (or re-submit) your loan mod package, call them to confirm receipt of your documents. Once they have your file and it’s under review, the foreclosure process will be postponed, pending approval or denial of the mod. Follow up frequently and again be persistent!

src=”http://i.ytimg.com/vi/wXKESulX5g4/2.jpg” align=”left”>http://www.get-a-loan-modification.com
business opportunityhome based businessonline business

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http://www.get-a-loan-modification.com
business opportunityhome based businessonline business

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href=”http://www.mortgageloanmodificationprogram.com/mortgage-loan-modification/mortgage-loan-modification-10-myths-about-starting-your-own-4#more-2572″ class=”more-link”>Read the rest of this entry »

http://www.get-a-loan-modification.com
business opportunityhome based businessonline business

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My application was denied because they said I have to make more than 1.5% of my existing loan balance. My loan balance is over $377,000 and I do not make more than $5,665/month. Is this correct? If I made that much I would afford my loan payments…. This is the Obama Making Home Affordable modification program. So frustrating…was trying to avoid foreclosure.

You’ll need to call your lender and VERIFY why your loan mod was denied. If they give you a difficult time, hang up and call again! Sounds odd, but it usually works! Depending on who your lender is, the customer service number you call is re-directed to different parts of the country. The 1.5% doesn’t make any sense so you’ll need to get straight answers from them. Lenders, depending on who the underlying investor is, will typically try to modify your loan down to where your debt-to-income ratio (DTI) is around 31% (divide your principal, interest, taxes and insurance (PITI) by your gross income and this will give you your DTI). Re-submit your loan modification package, if necessary and be persistent! Often times the person answering the phone won’t be updated or even educated on their employers’ loan mod programs.

Unless your lender is giving you the run around or they’re a small servicing company, there’s very little reason why they wouldn’t modify your loan if you have a legitimate financial hardship - which I’m assuming is the case since they accepted your mod application to begin with. If you were trying to do it yourself, consider calling HUD’s free loan modification service at (800) 569-4287 and see if they can help you. Once you submit (or re-submit) your loan mod package, call them to confirm receipt of your documents. Once they have your file and it’s under review, the foreclosure process will be postponed, pending approval or denial of the mod. Follow up frequently and again be persistent!

http://www.get-a-loan-modification.com
business opportunityhome based businessonline business

Duration : 0:4:58

Read the rest of this entry »

http://www.get-a-loan-modification.com
business opportunityhome based businessonline business

Duration : 0:4:58

/www.mortgageloanmodificationprogram.com/mortgage-loan-modification/mortgage-loan-modification-10-myths-about-starting-your-own#more-2568″ class=”more-link”>Read the rest of this entry »

My application was denied because they said I have to make more than 1.5% of my existing loan balance. My loan balance is over $377,000 and I do not make more than $5,665/month. Is this correct? If I made that much I would afford my loan payments…. This is the Obama Making Home Affordable modification program. So frustrating…was trying to avoid foreclosure.

You’ll need to call your lender and VERIFY why your loan mod was denied. If they give you a difficult time, hang up and call again! Sounds odd, but it usually works! Depending on who your lender is, the customer service number you call is re-directed to different parts of the country. The 1.5% doesn’t make any sense so you’ll need to get straight answers from them. Lenders, depending on who the underlying investor is, will typically try to modify your loan down to where your debt-to-income ratio (DTI) is around 31% (divide your principal, interest, taxes and insurance (PITI) by your gross income and this will give you your DTI). Re-submit your loan modification package, if necessary and be persistent! Often times the person answering the phone won’t be updated or even educated on their employers’ loan mod programs.

Unless your lender is giving you the run around or they’re a small servicing company, there’s very little reason why they wouldn’t modify your loan if you have a legitimate financial hardship - which I’m assuming is the case since they accepted your mod application to begin with. If you were trying to do it yourself, consider calling HUD’s free loan modification service at (800) 569-4287 and see if they can help you. Once you submit (or re-submit) your loan mod package, call them to confirm receipt of your documents. Once they have your file and it’s under review, the foreclosure process will be postponed, pending approval or denial of the mod. Follow up frequently and again be persistent!