In about half the states, the first mortgage can not come after you for the rest of the money — but in those states you have debt forgiveness
income at the foreclosure sale.
Not exact matches
To summarize, in the context of your divorce if you and your spouse are settling credit card debt, selling your home
at a short
sale, or your home is going into
foreclosure, you should be aware that you may have to deal with the tax consequences of the canceled debt
income on the back end.
The IRS will not count the amount forgiven by the mortgage holder as
income to the seller, thus giving distressed borrowers incentive to sell short rather than default; (2) restored the tax deduction for mortgage insurance premiums that expired
at the end of 2011; (3) the mortgage interest deduction untouched; and (4) tax relief for mortgage debt forgiveness was extended another year; providing homeowners tax relief on loan modifications, short
sales and
foreclosures.