The economy has let so many of us down lately that some of us have fallen behind on our mortgage. Fortunately loosing your home is not always the answer. Our service is not about Bankruptcy or a second mortgage either. We use federal guidelines to Qualify your mortgage for a loan modification. We can take your individual information and immediately let you know if you qualify for a government bailout loan modification.
I'm Ready To Start. Take me to see if I qualify for a government bailout loan modification.
Our mission is to help you keep your home. We want to keep you out of Bankruptcy and this is not a Short Sale or Refinance.
You may qualify for a government bailout loan modification. We do the calculations for you.
We provide you with the answer immediately after you enter your current mortgage situation unlike some websites that take your information then forward it to a mortgage attorney.
This site was developed by some average home owners that saw they could help others keep their homes.
We are not associated with any real estate agency or banking company. We are on Your Side.
Using our service provides you with all the information you need to handle a loan modification by yourself directly with your mortgage holder.
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A Loan Modification is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.
Question 1: In utilizing the Loan Modification option to bring an asset current, can the mortgagee include all fees and corporate advances?
Answer: Mortgagee Letter 2008-21 states in part: Legal fees and related foreclosure costs for work actually completed and applicable to the current default episode may be capitalized into the modified principal balance.
Question 2: May a mortgagee perform an interior inspection of the property if they have concerns about property condition?
Answer: Yes, per Mortgagee Letter 2000-05, page 20, the mortgagee may conduct any review it deems necessary to verify that the property has no physical conditions which adversely impact the mortgagor's continued ability to support the modified mortgage payment.
Question 3: Can a mortgagee include late charges in the Loan Modification?
Answer: Mortgagee Letter 2008-21 states that accrued late charges should be waived by the mortgagee at the time of the Loan Modification.
Question 4: When utilizing a Loan Modification option, can a mortgagee capitalize an escrow advance for Homeowner's Association fees?
Answer: HUD Handbook 4330.1 REV-5, Paragraph 2-1, Section B, Escrow Obligations states: Mortgagees must also escrow funds for those items which, if not paid, would create liens on the property positioned ahead of the FHA-insured mortgage.
Question 5: Is there a new basis interest rate which mortgagees may assess when completing a Loan Modification?
Answer: Yes, Mortgagee Letter 2009-35 states that the Mortgagee shall reduce the Loan Modification note rate to the current Market Rate. Please refer to Mortgagee Letter 2009-35 for more details.
Question 6: Are mortgagees required to re-amortize the total amount due over 360 month period?
Answer: Yes, per Mortgagee Letter 2009-35, the Mortgagee must re-amortize the total unpaid amount due over a 360 month period from the due date of the first installment required under the modified mortgage.
Question 7: What date is utilized when determining the correct interest rate for a Loan Modification?
Answer: The date the Mortgagee approves the Loan Modification (all verification completed and servicing notes documented, reported to SFDMS) is the date that Mortgagees are to use in determining the interest rate.
Question 8: Will HUD subordinate a Partial Claim, should a mortgagor subsequently default and qualify for a Loan Modification?
Answer: If a mortgagor subsequently defaults and qualifies for a Loan Modification, HUD will subordinate the Partial Claim.
Question 9: Are mortgagees required to perform an escrow analysis when completing a Loan Modification?
Answer: Yes, mortgagees are to perform a retroactive escrow analysis at the time the Loan Modification to ensure that the delinquent payments being capitalized reflect the actual escrow requirements required for those months capitalized.
Question 10: Can a mortgagee qualify an asset for the Loan Modification option when the mortgagor is unemployed, the spouse is employed, but the spouse name is not on the mortgage?
Answer: Based upon this scenario, the mortgagee should conduct a financial review of the household income and expenses to determine if surplus income is sufficient to meet the new modified mortgage payment, but insufficient to pay back the arrearage. Once this process has been completed the mortgagee should then consult with their legal counsel to determine if the asset is eligible for a Loan Modification since the spouse is not on the original mortgage.
The Loan Modification A loan modification is a change to the loan contract which is agreed to by the lender and the homeowner. The lender modifies the existing loan(s) in order to work with the homeowner because of a hardship. The purpose is to help make the loan(s) more affordable. Usually loan modifications are in the form of a rate reduction and/or fixing the rate for a certain period of time. In the past, loan modifications were only utilized when a borrower was delinquent and suffered a hardship such as a job loss, divorce, or illness. Now, borrowers can obtain modifications from their lender for unaffordable rate adjustments on adjustable rate mortgages. The earlier the homeowner addresses the issue, the better the chances are of negotiating a fixed rate and a payment that is manageable. If the homeowner can afford their home and but not their current mortgage then they may be eligible for a loan modification. A key factor that is required in every loan modification submission is the existence of a hardship. The hardship can be temporary in nature or permanent, but the borrower must be able to prove the hardship. The following are a sample of hardships that get loan modifications approved:
1. Adjustable Rate Mortgage Reset-Payment Shock
2.
Illness of the Borrower3.
Illness of a Borrowers Family Member16
4.
Curtailment of Income5.
Loss of Job6.
Abandonment of Property7.
Property Problem8.
Inability to Sell the Property9.
Inability to Rent the Property10.
Mortgage Servicing Problems11.
Transfer of Ownership Delays12.
Reduced Income13.
Failed Business14.
Job Relocation15.
Death of the Borrower16.
Death of Spouse or Co-Borrower17.
Death in the Family18.
Incarceration19.
Divorce20.
Marital Separation21.
Military Duty22.
Medical Bills23.
Damage to Property (natural disaster or unnatural)Notice that "My Realtor lied to me" and "My loan officer/broker lied to me" is not on this list. Keep this in mind when you write a hardship letter. Documenting the hardship is very important to the lender’s or servicer’s loss mitigation department and will be verified during the approval process. Without proper documentation, your file may be flagged as fraudulent. You definitely do not want this to happen for obvious reasons and it will slow down the process or terminate the process completely. There are two important things to remember about loan modifications: 17
1. A loan modification should be requested only if no other reasonable options are available and/or the homeowner is experiencing a hardship.
2. Loan modifications are designed for homeowners who can afford their homes but not their loans.
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How to Determine if You are a Candidate for a Loan Modification
Lenders and servicers will, in general, look for one thing when you submit a modification request. They look for a documentable hardship of course, but at the end of the day if they decide to grant your request for a loan modification all they really want to know is if you can afford the new payment(s). This is the big secret behind getting a loan modification approved. There is, however, an art to making loan modifications work. You must disqualify yourself from your old payments and at the same time qualify yourself on a new payment structure. It sounds complicated and it is at first but you will quickly learn important strategies for effectively processing loan modifications. To understand what the lender or servicer considers qualified, you have to know how lenders calculate your income. The income you can use to qualify for a modification is different from traditional income calculations used to qualify for traditional loans. Moreover, the difference in the qualification guidelines is typically in your favor.For a modification, you can qualify based on your documentable total household income. As such, you can count income from almost any source: Grandma’s SSI, income from child day care services, from a second job paid under the table, etc. so long as it can be proved. Proof must be in the form of bank statements, 1099’s or in some other documentable form as outlined in the submission paperwork you will provide the lender. In addition, if only one of two spouses was on the original loan, the other spouse’s income can count so long as it is documentable. 19
Once you calculate all documentable monthly income from all household sources you then have what you can present to the lender as the new qualifying income. To calculate a qualifying monthly mortgage payment, use the benchmark fully amortizing 5.00% rate on whatever the new balance might be, counting arrearages if they are added back into the loan. WARNING: this is only for a general qualifying exercise only; do not expect this rate or payment! If the payment at 5.00% is just too high, then you may not be an appropriate candidate for a modification. However, you can still request help with other services such as a deed in lieu of foreclosure, a short sale or postponing as long as possible a notice of trustee’s sale in an effort to help you transition to more affordable housing. 20
Communicating a Hardship Effectively
Effective communication is the single most important aspect of describing hardship issues. Many modification requests fail because the homeowners can not tell their story in a simple way. It is easy to forget there is a real human being analyzing the hardship letter within the lender’s or servicer’s loss mitigation department who is responsible for determining the existence of a real hardship. With that said you must keep your hardship letter simple and get to the point quickly. Loss mitigation departments are overwhelmed with foreclosures, short sales, and modification requests. They do not want to read a ten page letter regarding the loan officer who put them in the loan, why they bought the house, the memories they have had there and why they want to keep their home. When writing the hardship letter, keep the letter simple and to the point. In addition, handwrite the hardship letter. The fact is that people personally relate to handwriting more than a typewritten letter and this includes the lender’s or servicer’s loss mitigators. What follows on the next pages are perfect examples of sample hardship letters, a financial worksheet, an income and expense worksheet, a sample loan modification request and a sample stacking order for you to use. Notice as well that on the loan modification request and on the sample stacking order for a loan modification you will need to include documentation of your home’s value. You can obtain reliable documentation of your home’s value from a local Realtor, Title Company or from an appraiser.
Which is Worse, Foreclosure or Bankruptcy? The single most important question consumers ask themselves during the foreclosure process is whether it is better to lose their house to foreclosure or file for bankruptcy protection. A foreclosure will remain on your credit report for 7 years, while a bankruptcy remains for 10 years. If you ever plan on getting any kind of loan, especially a mortgage, lenders are going look at a foreclosure more seriously than they will a bankruptcy that doesn’t include a house. Even in the heyday of the subprime loan era you could obtain a loan one day out of bankruptcy. But a foreclosure was ALWAYS a black cloud and lenders usually wanted three to four years time to pass before considering a borrower for a loan. No one will argue that the days of banks lending to anyone with a pulse is over. What this translates to for the consumer is that you should expect to have to wait at least four years from the time of bankruptcy discharge to obtain a mortgage with relatively favorable loan terms. The main goal in trying to perform a loan workout with your lender is to avoid the catastrophic credit implications of a foreclosure or bankruptcy. But sometimes, even the best efforts to save your home and your credit fail. Hoping for the best but preparing for the worst is the mindset anyone in the foreclosure process should maintain. There are no guarantees that even the hardest efforts to work with your lender will meet with success. If you are to be prepared for the worst, then it is important to consider the process of bankruptcy.
There are different ways to file for bankruptcy and not all of your debts have to be included. So even if faced with bankruptcy, you’ll need advice from someone, either a good credit counselor or a bankruptcy attorney that can walk you through the choices you’ll face. 36
While the bankruptcy process in the U.S. is governed by federal laws and handled by a system of federal bankruptcy courts, state laws regarding consumer debts and the disposition of property also come into play. There are also different types of bankruptcy filings. No matter which course you take, the filing stays on your credit record for 10 years. This makes it very difficult to get any type of loan during the bankruptcy process and even afterwards. If you can obtain a loan it will surely be more expensive than if you did not file for bankruptcy. The two most common forms of personal bankruptcy are called Chapter 7 and Chapter 13. Under a Chapter 7 filling, you get to keep certain property (this is where state laws vary), but the rest is turned over to a court-appointed trustee that sells your eligible property or gives it to lenders to satisfy your debts. Under a Chapter 13 filing, you pay back your debts under a plan worked out by the court. The trustee collects payments, pays off your debts and makes sure you stick to the plan. If you own a business, you may want to consider a Chapter 11 filing. This let’s you stay in business, as long as the court and the people you owe money to approve of the plan to pay off your debts. If the court decides a trustee needs to be appointed, the trustee takes control of your business and its assets. Not all debts can be wiped clean in bankruptcy. The list includes alimony and child support, taxes, court fines and most student loans. New debts, taken on after the discharge, aren’t included. And if the judge finds out you’ve lied or committed fraud, your discharge can be denied. You can also choose which debts you want to have discharged while you keep paying off others. You might want to work out a payment plan so you can keep your car, for example. To do this, you have to sign a "reaffirmation agreement," which says that you promise to pay off that debt. If you don’t pay it back, the creditor can send it to a collection agency like any other debt. 37
If you’ve filed a Chapter 7 bankruptcy and gotten a discharge, you’ve got to wait 8 years before you can do it again. There are different limits on filing for Chapter 13, depending on whether you’re trying to get debts discharged. If you’re having trouble making payments or even if you are behind by a month or two, contact and attorney and/or your lender before you get further behind. If you can, do this before you are 30 days late or before you receive the official "notice of default," indicating you’re several months behind. This will insure you have time to get prepared before the formal foreclosure process begins. First of all, you need to get honest with yourself about your situation. You need to take a good hard look in the mirror and decide if you can really afford your home and if you really want to save it. Either way, you are going to have to make a plan and you are going to have to act on that plan. You may have to consider moving. Even if you do lose your house, you don’t want a foreclosure on your record when you go looking for a smaller house or a place to rent. One option is to ask the lender to hold off on foreclosing until you sell. If your mortgage balance is greater than your house is worth, you have the option of negotiating a short sale with your lender. You’ll still owe money to the lender even after the house is sold. In some cases, lenders will let you off the hook for that amount rather than go through the expense of foreclosing. But you may not be completely off the hook: you may owe taxes on that amount. Consult an accountant for more information regarding the tax consequences of short sales. You can also try something called a "deed in lieu of foreclosure" which basically means you turn over your house to the lender and walk away without owing anything. However, you’ll need to work this out with the lender as well.
A good attorney who knows real estate and mortgage law can help you when you are facing foreclosure. If you cannot afford proper legal representation, then you should seek assistance from a legal aid or pro bono attorney. You can also seek a referral from your local BAR Association or get help from a legitimate credit counselor (from an accredited, non-profit agency). 38
A competent third party is a great choice for most people because they may be able to help smooth out the process and make sure that no laws have been broken by the lender when you received the loan. If it is found that Truth in Lending Act, RESPA and other predatory lending law violations have occurred, then you may have legal recourse to sue your lender. A bankruptcy, then, would not be necessary and you can save your home and your credit form a foreclosure. If you never seek proper legal advice, then you will never truly know what rights you have to properly defend yourself against your lender. Deciding whether foreclosure or bankruptcy is worse for you can be difficult to define. What makes this such a difficult question to answer is that no two loans are the same, no two consumer hardships are identical and hence what is best for you will not be the same for others. Getting advice from competent and trustworthy sources and educating yourself about the process of foreclosure and the options at your disposal is the best way to begin to make a sound decision.
Real Estate Short Sales the Right Way
If you find yourself in a difficult real estate situation where your home and loan is upside-down, don’t fret, a short sale might just be the answer to help cure your mortgage woes. In today’s market, it is imperative that you take a step back from all of the noise to reflect upon your situation. At each point in your financial history, you made decisions that you believed would best help you realize your goals. Because nobody has perfect foresight into their future income status, or the property market generally, it is only natural to re-evaluate your current debt situation when things change unexpectedly. One option for home owners is short sale negotiations, which may allow you to sell your home to satisfy the existing loan. First and foremost, it’s important that you act as your own primary advocate in this situation. Put your best foot forward because short sales only work when fully agreed to by both the borrower and the lender (your mortgage holder). Understand that, given today’s extraordinary market environment, even high profile individuals are often in a position where there is a gap between what they can afford and what they believed they could afford in the future. Take the case of well-known TV personality Ed McMahon: his Beverly Hills home faced foreclosure due to unexpected changes in property value, interest rates and his own personal income (see Business Week). In order to satisfy the requirements of the home loan, Mr. McMahon has been working to reach an agreement with a third party to clear a short sale to satisfy his mortgage. Like Mr. McMahon, you may find it initially difficult to find a market clearing transaction to satisfy your lender, but remember: just as hard work and persistence allowed you to afford a home in the first place, diligence can help you overcome obstacles to find the best way to address to your current home loan. 49A short sale MUST be accepted by your current lender or servicer in order to proceed with the sale of your home. Short sales are considered a privilege and not a right. So, with that said, you must be prepared to provide proof and evidence that you qualify and deserve a short sale by your lender. Getting a lender to approve a short sale is primarily a question of economics. You have to provide hard numbers to show that the amount of money a bank will realize on the short sale is better than the amount it may recoup from foreclosing on the property and selling the property.
Your short sale submission package should include: 1. Hardship Letter - explaining the circumstances that make it impossible for them to pay the full amount of the loan. The seller needs to be able to show true financial hardship. Someone with the assets or the income to pay is unlikely to be considered. 2. Proof of employment or unemployment - W-2 forms from employers (or a letter explaining the seller is unemployed). 3. Proof of income - bank statements, two years of tax returns, and other financial documents outlining income and debt obligations. Most lenders will ask if you have an access to a retirement fund, investment fund, 401’s, stocks, and how much is accessible and why if these funds are not accessible has to be provided in a written statement.4. Comparative Market Analysis or CMA, Broker Price Opinion or BPO (Mini appraisal). The bank will need comparable sales data or a broker’s price opinion showing the current estimated of value of your home. Be very thorough with your analysis with Closed and then Active listings. Closed comparable sales are of course what they are looking for above all, but if you cannot find any homes sold in the last three months in the exact same complex or street or block due to the 50
sluggish market, be very detailed with your analysis and calculate by square footage, age, size, views, frontage and upgrades, amenities etc.. 5. Listing Agreement or Proof of Listing and The Listing Agreement in a Short Sale: Any offer is contingent primarily upon the Lender’s approval and secondarily on the buyer’s acceptance. The Listing has to be executed and advertised on the Multiple Listing Service (MLS) prior to sending your package for short sale consideration to the Loss Mitigation Specialist. Tip: In preparing the package, be careful about discrepancies between the seller’s income and the income used to obtain the loan. A big gap may indicate mortgage fraud, unless employment circumstances have drastically changed.
• Lender may ask for an Initial Title Report
51
• FHA and VA may have their own forms and special requirements as well Ultimately, a short sale can be understood as a negotiation to recognize a changed environment from when the loan was originally signed. Any offer to buy the property must be evaluated by the lender, who is in a favorable position of being able to determine whether to accept such an agreement. Because of this, it’s crucially important that you present your property in the best possible light, just as you would in selling your home directly. Never accept the least common denominator as the only solution to the issue. By working hard as an advocate for your own cause, you can make a solid case to the lender that a short sale might be in both parties’ best interest.
Negotiating Deficiency is Key When Attempting a Short Sale: With a short sale, the lender has three possible ways to handle the deficiency balance, which is the portion of the mortgage debt not covered by the sale of the home. First, the lender can attempt to collect the deficiency balance from the seller after the property has closed. Second, the lender may require the seller to sign an unsecured promissory note for the deficiency balance as a condition of agreeing to the short sale. If the new note is for less than the balance of the original debt, the difference would be considered canceled or forgiven debt. Third, the lender may agree to cancel the entire deficiency balance. You must negotiate for the release of both the property lien and the underlying personal debt secured by the note. If you fail to do this, the lender may not forgive the personal debt and it will become a collection.In short sales, just as in any negotiation, it’s important to put yourself in the lender’s position and try to understand their approach. The decision they make is based upon the opportunity cost of holding onto the property after foreclosure 52
and then determining what to do with the asset. If they believe that the stated property value is low then it will make it more difficult to clear a short sale. Because of this, it’s important to present the property as a potential investment to other buyers, putting your value proposition at the center to generate the highest possible offer. The higher the offer, the more likely your bank will be open to accepting a short sale. It is wise to consult with an Attorney or Real Estate Agent who is familiar with short sale negotiation and has significant experience working with lenders. Keep in mind that Attorney’s fees or Realtor fees come out of the lender’s net proceeds; therefore, you should not have to pay out of your own pocket for an Attorney or Realtor to assist you with the transaction.
The IRS on Shorts Sales, Foreclosures and Debt Forgiveness
From the IRS on Shorts Sales, Foreclosures and Debt Forgiveness The Mortgage Forgiveness Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for this relief. This provision applies to debt forgiven in 2007, 2008 or 2009. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion doesn’t apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition. The amount excluded reduces the taxpayer’s cost basis in the home. More information on claiming this exclusion will be available soon. The questions and answers, below, are based on the law prior to the passage of the Mortgage Forgiveness Debt Relief Act of 2007. 1. What is Cancellation of Debt?If you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the cancelled amount in income for tax purposes, depending on the circumstances. When you borrowed the money you were not required to include the loan proceeds in income because you had an obligation to repay the lender. When that obligation is subsequently forgiven, the amount you received as loan proceeds is reportable as income because you no longer have an obligation to repay the lender. The lender is usually required to 54
report the amount of the canceled debt to you and the IRS on a Form 1099-C, Cancellation of Debt. Here’s a very simple example. You borrow $10,000 and default on the loan after paying back $2,000. If the lender is unable to collect the remaining debt from you, there is a cancellation of debt of $8,000, which generally is taxable income to you. 2. Is Cancellation of Debt Income Always Taxable? Not always. There are some exceptions. The most common situations when cancellation of debt income is not taxable involve: Bankruptcy: Debts discharged through bankruptcy are not considered taxable income. Insolvency: If you are insolvent when the debt is cancelled, some or all of the cancelled debt may not be taxable to you. You are insolvent when your total debts are more than the fair market value of your total assets. Insolvency can be fairly complex to determine and the assistance of a tax professional is recommended if you believe you qualify for this exception. Certain farm debts: If you incurred the debt directly in operation of a farm, more than half your income from the prior three years was from farming, and the loan was owed to a person or agency regularly engaged in lending, your cancelled debt is generally not considered taxable income. The rules applicable to farmers are complex and the assistance of a tax professional is recommended if you believe you qualify for this exception.
Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. That is, the lender cannot pursue you personally in case of default. Forgiveness of a non-recourse loan resulting from a foreclosure does not result in 55
cancellation of debt income. However, this may result in other tax consequences, as discussed in Question 3 below. 3. I Lost My Home to Foreclosure. Are There Tax Consequences? There are two possible consequences you must consider: Taxable cancellation of debt income (Note: As stated above, cancellation of debt income is not taxable in the case of non-recourse loans). A reportable gain can occur from the disposition of the home because foreclosures are treated like sales for tax purposes. Often some or all of the gain from the sale of a personal residence qualifies for exclusion from income. Use the following steps to compute the income to be reported from a foreclosure: Step 1 - Figuring Cancellation of Debt Income (Note: For non-recourse loans, skip this section. You have no income from cancellation of debt). 1. Enter the total amount of the debt immediately prior to the foreclosure___________. 2. Enter the fair market value of the property from Form 1099-C, box 7___________. 3. Subtract line 2 from line 1.If less than zero, enter zero___________. The amount on line 3 will generally equal the amount shown in box 2 of Form 1099-C. This amount is taxable unless you meet one of the exceptions in question 2. Enter it on line 21, Other Income, of your Form 1040. Step 2 – Figuring Gain from Foreclosure 56
4. Enter the fair market value of the property foreclosed on. For non-recourse loans, enter the amount of the debt immediately prior to the foreclosure ________. 5. Enter your adjusted basis in the property (Usually your purchase price plus the cost of any major improvements) ____________. 6. Subtract line 5 from line 4. If less than zero, enter zero. The amount on line 6 is your gain from the foreclosure of your home. If you have owned and used the home as your principal residence for periods totaling at least two years during the five year period ending on the date of the foreclosure, you may exclude up to $250,000 (up to $500,000 for married couples filing a joint return) from income. If you do not qualify for this exclusion, or your gain exceeds $250,000 ($500,000 for married couples filing a joint return), report the taxable amount on Schedule D, Capital Gains and Losses. 4. I Lost Money on the Foreclosure of My Home. Can I Claim a Loss on My Tax Return? No. Losses from the sale or foreclosure of personal property are not deductible. 5. Can You Provide Examples?
A borrower bought a home in August 2005 and lived in it until it was taken through foreclosure in September 2007. The original purchase price was $170,000, the home is worth $200,000 at foreclosure, and the mortgage debt canceled at foreclosure is $220,000. At the time of the foreclosure, the borrower 57
is insolvent, with liabilities (mortgage, credit cards, car loans and other debts) totaling $250,000 and assets totaling $230,000. The borrower figures income from the foreclosure as follows: Use the following steps to compute the income to be reported from a foreclosure: Step 1 - Figuring Cancellation of Debt Income (Note: For non-recourse loans, skip this section. You have no income from cancellation of debt). 1. Enter the total amount of the debt immediately prior to the foreclosure___$220,000__. 2. Enter the fair market value of the property from Form 1099-C, box 7 ___$200,000__. 3. Subtract line 2 from line 1.If less than zero, enter zero___$20,000__. The amount on line 3 will generally equal the amount shown in box 2 of Form 1099-C. This amount is taxable unless you meet one of the exceptions in question 2. Enter it on line 21, Other Income, of your Form 1040. Step 2 – Figuring Gain from Foreclosure 4. Enter the fair market value of the property foreclosed. For non-recourse loans, enter the amount of the debt immediately prior to the foreclosure __$200,000__. 5. Enter your adjusted basis in the property.(Usually your purchase price plus the cost of any major improvements) ___$170,000__. 6. Subtract line 5 from line 4.If less than zero, enter zero___$30,000__.
The amount on line 6 is your gain from the foreclosure of your home. If you have owned and used the home as your principal residence for periods totaling at least two years during the five year period ending on the date of the foreclosure, you may exclude up to $250,000 (up to $500,000 for married couples filing a joint return) from income. If you do not qualify for this exclusion, or your gain exceeds 58
$250,000 ($500,000 for married couples filing a joint return), report the taxable amount on Schedule D, Capital Gains and Losses. In this situation, the borrower has a tax-free home-sale gain of $30,000 ($200,000 minus $170,000), because they owned and lived in their home as a principal residence for at least two years. Ordinarily, the borrower would also have taxable debt-forgiveness income of $20,000 ($220,000 minus $200,000). But since the borrower’s liabilities exceed assets by $20,000 ($250,000 minus $230,000) there is no tax on the canceled debt. Other examples can be found in IRS Publication 544, Sales and Other Dispositions of Assets, under the section "Foreclosures and Repossessions." 6. I Don’t Agree With the Information on the Form 1099-C. What Should I Do? Contact the lender. The lender should issue a corrected form if the information is determined to be incorrect. Retain all records related to the purchase of your home and all related debt. 7. I Received a Notice from the IRS on This. What Should I Do? The IRS urges borrowers with questions to call the phone number shown on the notice. The IRS also urges borrowers who wind up owing additional tax and are unable to pay it in full to use the installment agreement form, normally included with the notice, to request a payment agreement with the agency.
Loan servicer contact information
| Name | Web Site | Phone | Service Address | Fax |
| Allstate Mortgage Loans & Investments, Inc. | http://www.allstateocala.com/ | 866-351-0200 | P.O. 1201, Crystal River, FL 34423 |
352-351-4557 |
| American Eagle Federal Credit Union | www.americaneagle.org | 800-842-0145 | Attention: Loss Mitigation 1 Corporate Drive Lake Zurich, IL 60047 |
847-574-7658 |
| American Home Mortgage Servicing, Inc. | www.ahmsi3.com | 877-304-3100 | Attn: HAMP Processing 1525 S. Belt Line Road Coppell, TX 75019 |
866-452-1837 |
| AMS Servicing, LLC | www.ams-servicing.com | 866-919-5608 | 3374 Walden Avenue Buffalo, NY 14043 |
716-204-3875 |
| Aurora Financial Group, Inc. | https://www.auroralending.com/ | 1-800-648-0345 | 9 Eves Drive Marlton, New Jersey 08053 |
1-856-355-4765 |
| Aurora Loan Services LLC | https://www.myauroraloan.com/ | 800-550-0508 | P.O. Box 1706 2617 College Park Scottsbluff, NE 69363-1706 |
866-517-7975 |
| Bank of America, N.A. | www.bankofamerica.com/mha/ | 800-720-3758 | MHA Escalations Unit PO Box 940070 Simi Valley, CA 93094-0070 |
866-382-0489 |
| Bank United | http://www.bankunited.com/display.asp?navid=&id=117 | 866-615-0662 | Attn: Modification Department Mail Code: DO4-RESALT-560 7815 N.W. 148th Street Miami, FL 33016 |
877-263-8930 |
| Bay Federal Credit Union | http://www.bayfed.com/lo/mortgage.html | 888-422-9333 | 3333 Clares Street Capitola, CA 95010 |
831-479-6027 |
| Bay Gulf Credit Union | http://www.baygulf.com | 800-275-4229 | 3202 W. Waters Ave, Tampa, FL 33614 Tampa, FL 33614 |
813-932-3470 |
| Bayview Loan Servicing, LLC | www.bayviewloanservicing.com | 800-457-5105 | Attn: Specialized Asset Management 4425 Ponce De Leon Blvd., 5TH Floor Coral Gables, FL 33146 |
877-360-9593 or 305-646-9943 |
| Bramble Savings Bank | www.bramblesavings.com | 1-513-248-1222 | 954 State Route 28 Cincinnati, Ohio 45150 |
1-513-965-3953 |
| CCO Mortgage | www.ccomortgage.com | 877-745-7366 | 10561 Telegraph Road Glen Allen, VA 23059 |
888-777-1631 |
| Carrington Mortgage Services, LLC | www.carringtonms.com | 888-267-2417 | Attention: Home Retention P.O. Box 54285 Irvine, CA 92619-4285 |
877-267-1331 |
| Central Florida Educators Federal Credit Union | www.mycfe.com | 800-771-9411 | P.O. Box 958471 Lake Mary, Florida 32795-9814 Attn: Real Estate - HAMP Team |
407-893-5727 |
| Central Jersey Federal Credit Union | www.cjfcu.org | 732-634-0600 | 380 Berry St Woodbridge NJ 07095 |
732-726-8709 |
| Chase Home Finance LLC | http://www.chase.com/myhomep | 866-550-5705 | Regular Mail: PO Box 469030 Glendale, CO 80246 Overnight Mail Attn: Chase Fulfillment Center 4500 Cherry Creek Drive South Suite 410 Glendale, CO 80246 |
866-989-1356 |
| Community Bank & Trust Company | www.combk.com | 125 N. State Street, Clarks Summit, PA 18411 | 570-586-0177 | |
| CitiMortgage, Inc. | www.mortgagehelp.citi.com | 866-915-9417 | Citi Ham Trial Agreements NTSB 1680, 680 Colwell Blvd Irving, TX 75039 |
|
| Citizens 1st National Bank | https://www.citizens1st.com/ | 800-311-7531 | 606 S. Main Street Princeton, IL 61356 | 815-872-0247 |
| Citizens First Wholesale Mortgage Co. | https://www.cfwmortgage.com/ | 800-477-1086 | 560 Fieldcrest Drive The Villages, FL 32162 |
352-753-4482 |
| Countrywide Home Loans Servicing LP | http://my.countrywide.com/media/hasp.html | 800-720-3758 | PO Box 940070, Simi Valley, CA. 93094-0070 | 866-382-0489 |
| CUC Mortgage Corporation | www.cucmortgage.com | 800-342-4998 | P.O. Box 12670 Albany, NY 12212 |
N/A |
| Digital Federal Credit Union | www.dcu.org/ | 220 Donald Lynch Blvd Marlborough, MA 01752 |
866-260-0119 Attn: HAMP | |
| DuPage Credit Union | www.dupagecu.com | 800-323-2611 | Attn: Alternative Loan Solutions P O Box 3930 Naperville, IL 60567 |
630-305-6030 |
| EMC Mortgage Corporation | http://www.emcmortgagecorp.com | 800-723-3004 | Regular Mail Chase/EMC Fulfillment Center PO Box 293150 Lewisville, TX 75029 Overnight Mail Chase/EMC Fulfillment Center 2780 Lake Vista Drive Lewisville, TX 75067 |
917-849-2677 |
| Eaton National Bank & Trust Co | www.enbbank.com | 937-456-5544 | 110 West Main Street, Eaton, OH 45320 | 937-456-6847 |
| Farmers State Bank | https://farmersstate-oh.com | 800-350-2844 | 11 S. Main St., P.O.Box 801, West Salem, OH 44287 |
419-853-4730 |
| Fidelity Homestead Savings Bank | http://www.fidelityhomestead.com | 504-569-3490 | 201 St. Charles Ave, 20th Floor New Orleans, LA
70170 |
504-569-3537 |
| First Bank | http://www.firstbanks.com | 800-760-2265 | 1 First Missouri Center St. Louis, MO 63141 |
314-264-0220 |
| First Financial Bank, N.A. | http://www.first-online.com | 1-812-238-6311 | 1 First Financial Plaza Terre Haute, Indiana 47807 |
1-812-238-6137 |
| First National Bank of Grant Park | http://www.1st-nationalbank.com/ | 815-465-2161 | 119 N Main Street, Grant Park, IL 60940 | 815-465-6245 |
| First Keystone Bank | http://www.firstkeystonebankonline.com | 610-565-6210 | 22 West State Street Media, PA 19063 |
610-892-5122 |
| Franklin Credit Management Corporation | http://www.franklincredit.com/ | 800-255-5897 | Attn: Loss Mitigation 101 Hudson Street 25th Floor Jersey City, NJ 07302 |
201-839-4545 |
| Fresno County Federal Credit Union | http://www.fresnocfcu.com/ | 800-613-2328 | 4979 E. University Ave Fresno, CA 93727 | 559-451-2496 |
| Glass City Federal Credit Union | www.glasscityfcu.com | 800-837-3595 | 1340 Arrowhead Drive Maumee, OH 43537 |
419-887-1099 |
| GMAC Mortgage LLC | www.gmacmortgage.com | 800-766-4622 | 2711 North Haskell Ave, Suite 900 Dallas, TX 75204 |
866-709-4744 |
| Golden Plains Credit Union | www.gpcu.org | 877-775-8175 | 1135 College Drive, Suite C, Garden City, KS 67846 | 620-276-8072 |
| Grafton Suburban Credit Union | www.graftonsuburban.com | 508-839-5493 | 86 Worcester Street, North Grafton, MA 01536 | 508-839-5750 |
| Great Lakes Credit Union | www.glcu.com | 800-442-3488 | ||
| Greater Nevada Mortgage Services | http://www.gnms.com/ | 800-421-6674 | 4070 Silver Sage Drive, Carson City, NV 89701 | 775-884-7041 |
| Green Tree Servicing LLC | www.gtservicing.com | 800-643-0202 | 7360 S Kyrene Road T214 Tempe, AZ 85283 |
877-265-9717 |
| Hartford Savings Bank | http://www.hartfordsavingsbank.com | 800-844-3812 | 1400 Schauer Drive, Hartford,WI 53027 |
262-673-0459 |
| Hillsdale County National Bank | www.countynationalbank.com | 517-439-6121 | One South Howell Street Hillsdale, MI 49242 |
517-437-3151 |
| HomEq Servicing | www.homeq.com | 877-867-7378 | P.O. Box 160248 Sacramento, CA 95816-0248 |
866- 554-5325 |
| HomeStar Bank and Financial Services | www.homestarbank.com | 815-468-2265 | 3 Diversatech Dr., Manteno, IL 60950 |
815-468-2378 |
| Home Loan Services, Inc. | www.viewmyloan.com | 800-622-5035 | Loan Services P.O. Box 1838 Pittsburgh, PA 15230-1838 |
412-499-3400 |
| Horicon Bank | www.horiconbank.com | 920-485-3080 ext.7310 | 326 E Lake Street, PO 126 Horicon, WI 53032 |
920-485-3059 |
| Horizon Bank, NA | www.accesshorizon.com | 888-873-2640 | 515 Franklin Square, Michigan City, IN 46360 | 219-874-9374 |
| Iberiabank | www.iberiabank.com | 800-968-0801 | 1680 Fruitville Rd. Sarasota, FL 34236 | 941-556-5821 |
| IBM Southeast Employees Federal Credit Union | www.ibmsecu.org | 800-873-5100 | Attn: Mortgage Modifications PO Box 2850 Kennesaw GA 30156 |
678-797-6329 |
| IC Federal Credit Union | http://www.iccreditunion.org | 800-262-1001 | Attn: Judy Kaddy 300 Bemis Road Fitchburg, MA 01420 |
978-343-4949 |
| Idaho Housing and Finance Association | www.ihfa.org | PO Box 7899 Boise, Idaho 83707 |
208-331-4800 | |
| iServe Residential Lending, LLC | http://www.urlending.com | 1-888-875-8326 | 13520 Evening Creek Drive Suite 400, San Diego, CA 92128 |
1-480-614-6710 |
| iServe Servicing Inc. | http://www.iservecompanies.com/ | 1-214-496-9500 | 222 W. Las Colinas Blvd. Suite 1252E, Irving, TX 75039 |
1-214-496-9501 |
| J.P. Morgan Chase Bank, NA | http://www.chase.com/myhomep | 866-550-5705 | Regular Mail: PO Box 469030 Glendale, CO 80246 Overnight Mail Attn: Chase Fulfillment Center 4500 Cherry Creek Drive South Suite 410 Glendale, CO 80246 |
866-989-1356 |
| Lake City Bank | www.lakecitybank.com | 888-522-2265 | ATTN: Candy Little PO BOX 1387 Warsaw, IN 46581-1387 |
574-267-9128 |
| Lake National Bank | www.lakenationalbank.com |
440-205-8100 |
PO Box 1048 Mentor, Ohio 44061-1048 |
N/A |
| IBM Lender Business Processing Services (LBPS) | www.LBPS.com |
866-570-5277 |
PO Box 4121 Beaverton, OR 97076-4121 |
877-649-0743 |
| Litton Loan Servicing | www.littonloan.com | 800-247-9727 | 4828 Loop Central Drive Houston, TX 77081 |
713-793-4923 |
| Los Alamos National Bank | www.lanb.com | 800-684-5262 | PO Box 60 Los Alamos NM 87544 |
505-663-4053 |
| Marix Servicing, LLC | www.marixservicing.com | 866-406-2749 | 1925 W. Pinnacle Peak Road Phoeniz, AZ 85027 |
623-249-2070 |
| Midwest Bank and Trust Co. | http://www.midwestbank.com/ | 708-456-4700 | 1606 N. Harlem Avenue, Elmwood Park, IL | 708-456-9437 |
| Mission Federal Credit Union | www.missionfcu.org | 800-500-6328 x2074 | PO Box 919023 San Diego, CA 92121 Attn: Loss Mitigation |
858-546-2058 |
| Metropolitan National Bank | https://www.metbank.com/default.asp | 866-796-3876 | Attn: Mortgage Department P.O. Box 8010 Little Rock, AR 72203 |
501-907-8709 |
| MorEquity, Inc. | www.morequity.com | 800-441-3805 | 1) PO Box 3788 Evansville IN 47736-9984 2) 601 NW Second Street, Evansville IN 47708 |
812-475-7074 |
| Mortgage Center, LLC | www.mortgagecuso.com | 866-856-3750 | 20300 Civic Center Dr, # 403 Southfield, MI 48076 |
248-799-8556 |
| Mortgage Clearing Corporation | www.mortgageclearing.com | 918-749-2645 | ||
| National City Bank | www.pncmortgage.com | 800-523-8654 | 3232 Newmark Drive Miamisburg, OH 45342 |
937-910-4009 |
| Nationstar Mortgage LLC | www.nationstarmtg.com | 888-850-9398 | Attn: HAMP 350 Highland Drive Lewisville, TX 75067 |
214-488-1993 |
| Navy Federal Credit Union | www.navyfederal.org | 1-888-842-6328 | 3820 Follin Lane S.E Vienna, VA 22180 |
703-255-7947 |
| Oakland Municipal Credit Union | www.omcu.com | 510-637-6600 | 250 Frank H. Ogawa Plaza Suite 6301 Oakland , CA 94612 |
510-238-5227 |
| Ocwen Financial Corporation, Inc. | www.ocwencustomers.com | 800-746-2936 | 16661 Worthington Rd Ste 100 West Palm Beach, FL 33409 |
407-737-6174 |
| OneWest Bank | www.owb.com/mymortgage | 800-781-7399 | Indymac - 1, 2900 Esperanza Crossing Austin, TX 78758 |
866-235-2366 |
| ORNL Federal Credit Union | www.ornlfcu.com/ | 800-676-5328 | Attn: Mortgage Modification Dept 221 S. Rutgers Avenue Oak Ridge, TN 37830 |
865-481-5810 |
| Park View Federal Savings Bank | www.parkviewfederal.com | 440-914-3900 | 30000 Aurora Road, Solon, OH 44139 | 440-914-3656 |
| Pathfinder Bank | www.pathfinderbank.com | 1-315-343-0057 | 214 West First Street, Oswego, NY 13126 | 1-315-207-8035 |
| PennyMac Loan Services, LLC | www.pnmac.com/index.php | 866-545-9070 | Attn: Karen Denton 27001 Aguora Road, Suite 350 Calabasas, CA 91301 Attn: Karen Denton |
818-224-7510 |
| PNC Bank, National Association | www.pncmortgage.com | 800-523-8654 | 3232 Newmark Drive Miamisburg, OH 45342 |
937-910-4009 |
| Purdue Employees Federal Credit Union | www.purdueefcu.org | 800-627-3328 | P.O. Box 1950 West Layette IN 47996-1950 |
765-497-7477 |
| Q lending, Inc. | www.qlending.com | 517-439-6121 | 1 Corporate Drive, Suite 360 Lake Zurich, IL 60047 |
847-574-7658 |
| Quantum Servicing Corporation | www.quantum-servicing.com | 813-371-0270 | 6302 E. MLK Blvd., Suite 300 Tampa, FL 33619 |
N/A |
| RBC Bank (USA) | www.rbcbankusa.com | 1-866-777-2179 | 3201 Beechleaf Court Raleigh, NC 27604 |
1-877-530-0765 |
| RG Mortgage Corporation | www.rgmortgage.com/mortgage | 888-264-4674 | PO Box 362394 San Juan, PR. 00936-2394 |
787-756-2845 |
| Residential Credit Solutions | 800-737-1192 | 4282 North Freeway Fort Worth TX 76137 |
888-775-7250 | |
| Roebling Bank | http://www.roeblingbank.com/ | 609-668-6500 | Route 130 & Delaware Avenue, Roebling , NJ 08554 | 609-668-6255 |
| RoundPoint Mortgage Servicing Corporation | www.rpmservicing.com/ | 877-426-8805 | P.O. Box 19409 Charlotte, NC 28219-9409 |
888-364-5558 |
| Saxon Mortgage Services | www.saxononline.com | 800-594-8422 | Saxon Attention: Home Preservation HMP
Documentation Department 4708 Mercantile Drive North Fort Worth, TX 76137 |
888-240-1885 |
| Schools Financial Credit Union | www.schools.org | 800-962-0990 | C/O Real Estate Department 1485 Response Rd Suite
126 Sacramento CA, 95815 |
916-569-2047 |
| SEFCU | www.sefcu.com | 866-733-2880 | 700 Patroon Creek Blvd Albany, NY 12206 |
518-464-5213 |
| Select Portfolio Servicing | www.spservicing.com | 888-818-6032 | PO BOX:65250 Salt Lake City, UT 84165-0250 3815 S. West Temple Salt Lake City, UT 84107 |
801-293-3936 |
| Servis One Inc.,dba BSI Financial Services, Inc | www.bsifinancial.com | 866-209-4178 | Attn: HAMP Department P.O. Box 517, 314 S. Franklin Street, Titusville, PA 16354 |
814-217-1366 |
| ShoreBank | www.sbk.com | 800-905-7725 | Attn: Kenisha Davis 3401 South King Drive, Chicago, IL 60466 |
773-420-4501 |
| Silver State Schools Credit Union | www.silverstatecu.com | 800-357-9654 | 1 Corporate Drive Suite 360 Lake Zurich, IL 60047 |
847-574-7658 |
| Sound Community Bank | www.soundcb.com | 800-458-5585 ext 362 | 2005 5th Ave., Seattle, WA 98121 |
866-216-3405 |
| Specialized Loan Servicing, LLC | http://www.sls.net/ | 800-315-4757 | 8742 Lucent Blvd., Suite 300, Highlands Ranch, CO 80129 | 720-241-7526 |
| Spirit of Alaska Federal Credit Union | www.spiritofak.com | 907-459-5974 | Mortgage Dept 1417 Gillam Way Fairbanks, AK 99701 |
907-459-5980 |
| Stanford Federal Credit Union | www.sfcu.org | 888-723-7328 | Attn: Tram Le 1860 Embarcadero Road Palo Alto, CA 94303 |
866-743-3151 |
| Sterling Savings Bank | www.sterlingsavingsbank.com | 800-772-7791 | Attn: Tram Le 111 N. Wall, Spokane, WA 99201 |
509-624-8038 |
| Suburban Mortgage Company of New Mexico | smcnm.com | 1-505-298-7456 | 3707 Eubank Blvd. N./E. Albuquerque, NM |
1-505-292-4915 |
| Tempe Schools Credit Union | www.tscu.org | 480-967-9475 | 2800 S. Mill Ave., Tempe, AZ 85282 | 480-776-3729 |
| Technology Credit Union | www.techcu.com | 800-553-0880 | 2010 N First Street San Jose, CA 95131 Attn: LAD |
408-453-8742 |
| The Golden 1 Credit Union | http://www.golden1.com/ | 800-553-0880 | 8945 Cal Center Drive Sacramento, CA 95826 |
847-574-7658 |
| United Bank | http://www.unitedbankwi.com |
1-715-835-6865 |
3625 Gateway Dr. Eau Claire, WI 54701 |
715-835-6870 |
| United Bank Mortgage Corporation | www.unitedbankofmichigan.com |
800-968-1990 |
900 East Paris SE, Grand Rapids MI 49546 | 616-559-4631 |
| Urban Trust Bank | http://www.urbantrustbank.com/ | 1-407-732-5698 | 400 Colonial Center Parkway, Lake Mary FL 32789 | 1-407-732-5698 |
| U.S. Bank National Association | www.usbank.com | 866-932-0462 | P.O. BOX 20005 OWENSBORO, KY 42304-0005 |
N/A |
| Vantium Capital, Inc. | http://www.acqura.net | 866-660-5804 | 6500 International Parkway Suite 1500 Plano, TX 75093 |
972-444-3356 |
| Verity Credit Union | http://www.veritycu.com | 800-836-8172 | CU Home Mortgage Solutions PO Box 75989 Seattle, WA 98175 |
206-361-5300 |
| Visit Financial Corp. | www.vistfc.com | 1240 Broadcasting Rd. Wyomissing, PA 19605 |
||
| Wachovia Mortgage, FSB | www.wachovia.com | 800-922-4684 | 4101 Wiseman Blvd Mailcode TX 1616 San Antonio, TX 78251 |
866-359-7363 |
| Wachovia Bank, NA | www.wachovia.com | 800-922-4684 | 1000 Blue Gentian Road Suite 300 Eagan MN 55121 | 866-359-7363 |
| Wealthbridge Mortgage Corp. | www.wealthbridge.com | 866-702-4865 | 15455 NW Greenbrier Pkwy, Ste 111, Beaverton, OR 97006 | 503-597-7518 |
| Wells Fargo Bank, NA | www.wellsfargo.com/homeassist | 800-678-7986 | HAMP Application Documents 1000
Blue Gentian Road Suite 300 X9999-01N Eagan MN 55121 Customer Service Correspondence PO Box 10335 MAC: X2302-017 Des Moines, IA 50306 |
866-359-7363 |
| Wescom Central Credit Union | www.wescom.org | 888-493-7266 | 5601 E. La Palma Avenue Anaheim, CA 92807 | 626-535-1357 |
| Wilshire Credit Corporation | https://www.wcc.ml.com | 800-720-3758 | PO Box 8517 Portland, OR 97207-8517 |
866-382-0489 |
| Yadkin Valley Bank | www.yadkinvalleybank.com | 336-258-6252 | PO Box 96 Pfafftown, NC 27040 |
336-258-6252 |