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Upside Down on Mortgage |
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My boyfriend wants to sell his house, however he owes more than what he paid for it because he took equity out of the home in order to buy down his interest rate. He spoke with an agent friend of his and she told him to try a "short sale" on his property. How does that work and would he qualify to sell his property that way. |
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In sme cases, if the homeowner has no other resources, the mortgage company will agree to accept whatever the property brings in an open market sale, and forgive the rest of the debt. That's known as a short sale. It's much better on a credit record than a foreclosure would be. But the IRS regards the forgiven debt as taxable income to the person who borrowed it in the first place. |
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Edith
Originally published on August 12, 2007 |
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