Suggestions For Deficiency Judgment Disclosure?
if any one can share what they use to disclose the deficiency judment when doing a short i would appreciate it. if i cant find a free one floating around im just going to try and type one up myself. any suggestions on the wording or should i just use plain english. any suggestions on what i should put into it would be much appreciated. thanks
I'd like an answer to this as well. Theoretically, if the one doing the short sale didn't have any knowledge of dificiency judgements, I'm not sure there'd be any liability. I guess that's moot since I DO have knowledge, though. As I embark on my first SS myself, I'm under the impression you should just make your SS offer contingent upon the bank NOT pursuing a DJ. This way the only remaining hurdle in that area would be the 1099, which is easier to swallor for the seller.....I suppose.
rocco, thats basically what im saying Deficiency Judment / 1099. whatever you want to call it. basically just something in writing explaining to the seller that they could be taxed on the amount that the bank takes as a loss. having your contract subject to the bank not issuing a 1099/DJ would probably kill alot of short sales, because i hear alot of banks do 1099 the seller although they didnt on my last short.
Zin... to my knowledge, there is no statute of limitations on a lender issuing a 1099... if they issue late, they simply incur a penalty.
right, but on our deal they told us upfront that they were NOT going to 1099 the seller. im just saying that it would be wise to have the seller sign a disclosure form incase the bank does 1099 them, just simply stating that they are aware it could happen and dont hold me responsible for it. thats all.
but from roccos post, having all your purchase contracts subject to the lender NOT issuing a 1099 might kill alot of deals, because maybe they want to issue one.[ Edited by ZinOrganization on Date 11/30/2004 ]