May
31
Hi Everyone – question for you
We are in the process of Moving to California from Wisconsin
We weren’t able to sell our house there but were able to lease it for 2 years for a rate that
covers Mtg, Taxes and Prop Mgmt fees so I think we did very well.
We’re looking to buy here but my worry is that the lease will only be looked at as income and
the existing mortgage will be taken into consideration dramatically lowering our borrowing power
Can anyone shed some light on this?
thanks in Advance!

by thomasbrandt
We are residents of Texas and the property in foreclosure is in Delaware. Second mortgage holder is threatening to file a 1099.
Yes they can. TX practice is to use a Trust Deed, not a standard mortgage. No court action is needed to foreclose on a TD.
No judgment is needed to write off a bad debt and send the borrower a Form 1099-C for the COD income.
The lender has decided that you are not worth suing for the debt and is trying to use the threat of a possibly massive tax debt (that the IRS WILL collect) to prompt you into paying something towards the debt that you owe.