Interesting – I had not seen that anywhere. I thought the income taxes were owed on a shortsale but not a foreclosure and was arguing with a friend who said they were owed on both. I guess that is some good news if they are not owed on either. I am ok with the repurchase restrictions even for 5 years – who would want to buy into this mess again any time soon?
The larger house (3br) next door to mine (2 br) recently sold in a short sale or foreclosure for less than I paid for mine. Based on that closing price I think my home’s value is probably worth $150k less than I paid for it. I don’t really have $150k to bring to the table for a refinancing or traditional sale, even if I cashed out of my retirement savings. And I really wouldn’t want to owe taxes that I would not be able to pay on top of a $150k loss.
(My original “plan” to get funds from the sale of a condo to pay down the loan on the house to get payments down to an affordable level tanked with the value of the condo.)
I paid property taxes (and appealed) and am still making payments, and I have cash flow to continue paying on both the house and condo for about another year, but after that I will be tapped out. I was wondering the best course to take, so would you suggest I start call the lender to request a shortsale approval for the house now or do I have to list the house for sale first, or does it really take defaulting to get their attention? And do they make you run through all the rest of your assets before deciding? If that is the case I may be better off with bankruptcy than depleting retirement funds (less than $100k anyway)? Thank you for the information. I appreciate no I told you so’s since I kick myself already.
