Somewhere along they way they pulled out an additional $390k (on top of their original loan.)
Amount owed: $582,589.15
Back to the bank today when no one would pay $350k at the steps.
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Here is the kicker. Because the Home Equity Loan is generally considered for home improvement, the proceeds of the loan is not taxable as income. (390K virtually tax free)
The interest on the loans was tax deductible.
The loss of the property due to foreclosure has the potential to be deducted against future income – possibly at the value that the house was appraised at when they took out the Home Equity Loan.
The only counterbalance would have been the banks 1099 for loan loss forgiveness.. but that has been waived away for a while.
swwwweeeeettttt (CS) <-- no way related..
