San Diego Real Estate Defaults: How to Avoid Deficiency Judgments
March 1st, 2008 Categories: Market Trends, New Homes, Real Estate News, San Diego Real Estate
I am a huge believer in individual responsibility and paying my own way in life even if its the price of an expensive mistake.
But what about San Diego area homeowners who absolutely cannot hang onto their homes any longer? What are they to do when rising interest rates cause payments to exceed monthly incomes and they cannot refinance because their homes are now worth less than what they owe the mortgage lender?
They often feel they are stuck in a can of worms.
We receive lots of calls from concerned and ethical San Diego homeowners in this situation. They are ashamed, embarrassed and scared. Aside from the trauma of losing their homes, they fear income tax consequences and the possibility of a deficiency judgment from their lender(s).
I had intended to address this thorny issue here sometime next week, but blogging friend, New York real estate broker and attorney Joseph Ferrara tackled mortgage default issue this morning in an excellent article over at Sellsius Real Estate Blog.
He points out that income tax consequences for forgiven mortgage debt were thrown out last fall and that the chances of a deficiency judgment may be slim especially if the purchase moneoy mortgage(s) were not refinanced. And even if they were, most lenders will choose to foreclose under the terms of the trust deed instead of the courts.
I encourage you to read and bookmark the article!
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