Ok, we have HR 3648, which is the Mortgage Debt Relief Act of 2007--which allows some people who've been forclosed on, or had to short sale to not have to claim their deficiency as 'forgiven' debt in a 1099 form as income...
I live in PA--which is a state that allows for Deficiency Judgements after foreclosure.
Here is my question:
What incentive do lenders have to 'forgive' the deficiency balance as opposed to just suing for a deficiency judgement???
Meaning do they get a tax break or other incentive if they forgive the debt via 1099ing ?
See, I've read through this bill, and while it DOES allow a major benefit to those who have been foreclosed upon, or who've been 1099'd for a deficiency balance--I cannot ANYWHERE see ANYTHING that explains what INCENTIVE that bank/lender has to to this.
Surely, if there is NO INCENTIVE for the bank/lender to 'forgive' the debt or deficiency balance--VERY FEW WILL DO SO--
Really--think about it--the lender had no propblem foreclosing--why would they forgive anything so that you can get break.
I am disturbed because if there is no incentive to the lender to do such, then the entire bill is of little use to anyone in the REAL WORLD and will serve as nothing more than a worthless bill that we as taxpayers paid to get, but cannot access...
I do see 1 "possible" incentive as the bank NOT having to go through further litigation to win a deficiency judgement...so they might save some legal fees, but if they sue and the debtor files BK, they can just "charge off" the BK discharged debt...so basically, they can either charge off now, or charge off later...Where is the incentive to "forgive"
Please tell me the "incentive" wasn't the little speech Bushy-boy gave which asked lenders to work with the debtors...that was a joke--A bank is not in the "forgiveness" business-so if there is no incentive in some monetary benefit to the bank--they will not ever use this option...
I live in PA--which is a state that allows for Deficiency Judgements after foreclosure.
Here is my question:
What incentive do lenders have to 'forgive' the deficiency balance as opposed to just suing for a deficiency judgement???
Meaning do they get a tax break or other incentive if they forgive the debt via 1099ing ?
See, I've read through this bill, and while it DOES allow a major benefit to those who have been foreclosed upon, or who've been 1099'd for a deficiency balance--I cannot ANYWHERE see ANYTHING that explains what INCENTIVE that bank/lender has to to this.
Surely, if there is NO INCENTIVE for the bank/lender to 'forgive' the debt or deficiency balance--VERY FEW WILL DO SO--
Really--think about it--the lender had no propblem foreclosing--why would they forgive anything so that you can get break.
I am disturbed because if there is no incentive to the lender to do such, then the entire bill is of little use to anyone in the REAL WORLD and will serve as nothing more than a worthless bill that we as taxpayers paid to get, but cannot access...
I do see 1 "possible" incentive as the bank NOT having to go through further litigation to win a deficiency judgement...so they might save some legal fees, but if they sue and the debtor files BK, they can just "charge off" the BK discharged debt...so basically, they can either charge off now, or charge off later...Where is the incentive to "forgive"
Please tell me the "incentive" wasn't the little speech Bushy-boy gave which asked lenders to work with the debtors...that was a joke--A bank is not in the "forgiveness" business-so if there is no incentive in some monetary benefit to the bank--they will not ever use this option...