What todo ifI never recieved a 1099 after a foreclosure?

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What todo ifI never recieved a 1099 after a foreclosure?

After I became behind on payments, an investment property of mine was repossessed by the bank in 2007 and sold to a buyer by auction in 2008. It was an 80/20 loan and the second mortgage was sold to a collection agency. I know that I am still liable for the second mortgage, but I never received a 1099 for the first after the auction? What does this mean, and what do I do? Is it possible that the bank reported this to the IRS and not me? Or are they still planning on pursuing me for the deficiency? I thought they only had 90 days to file a deficiency judgment? Why am I still in limbo?

Asked on March 10, 2011 under Real Estate Law, New York

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

If you never received a 1099 after the foreclosure, it could mean one of three things. It could mean that the sale at auction fetched more than you owed, so there is no deficiency that caused you to obtain a 1099 as income.  Meaning, you didn't get a windfall of the remaining amount owed on your mortgage such that the mortgage company didn't have to write it off and in turn show that as income to you (what used to occur in short sales).  It could mean the mortgage company simply hasn't gotten around to sending it to you (though if it occurred in 2008, you can pretty much know that it won't occur). The third option could be that the mortgage company is no longer in business. The bank could not have reported it to the IRS without sending it to you, too. Your second mortgage if with a collection agency is on a time clock too. If the collection agency has not attempted to collect that from you either, rest assured some time soon that company will be time barred.


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