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Ask TexLaw Your Own Question
TexLaw, Attorney
Category: Legal
Satisfied Customers: 4430
Experience:  Lead trial/International commercial attorney licensed 11 yrs
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Customer Question

I'm considering a Bank of America cooperative short sale. Will I be liable for or taxed on the amount between current value & loan amt? If I have to foreclose, can the Bank come after my IRA funds or any other property?
Submitted: 4 years ago.
Category: Legal
Expert:  TexLaw replied 4 years ago.

Zachary D. Norris :


Zachary D. Norris :

I'd be happy to answer your questions.

Zachary D. Norris :

Are you there?

TexLaw and 3 other Legal Specialists are ready to help you
Customer: replied 4 years ago.
I'm here - I was waiting and waiting for an answer. Can't see how to respond to your query as to whether I'm here
Expert:  TexLaw replied 4 years ago.
In California, a bank cannot pursue you for the deficiency between the amount you short sale and the amount still owed. This is the same for foreclosures. However, you will be liable via a 1099 on the amount that is the difference between what the price of the house sold in the short sale or foreclosure, and the amount still owed on the mortgage.

A lot of times this won't matter if you haven't earned much that year. However, because of this factor, it is often advisable for one to conduct a short sale and have power over the amount the house is sold for rather than allow the bank to offer it through a foreclosure.

Also, your IRA is not subject to a judgment in California.
Expert:  TexLaw replied 4 years ago.

I just saw your negative feedback. Was there a problem receiving my answer. It shows that I have posted on my end.

Please let me know, as I have answered the question. If you need further information, let me know that as well. If you are satisfied with the answer, please reconsider the negative post as it affects my ratings.

-Zachary D. Norris

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