Deficiency covered under homestead?

[theylive]

I already posted this topic in another thread, but haven't had any replies. I am in the process of a short sale contract on my primary residence. The cash offer is for $40k and I owe $108k on the condo. I am on my second lawyer and he is acting like this whole thing is no big deal (to me it's huge!) He is saying that BofA will write off the deficiency as a gift or gift tax?, and issue me a 1099. I then will be protected under my homestead exemption and not have to pay a dime. Has anyone else heard of this?

[Evan Bedard]

Hi theylive,

He is saying that BofA will write off the deficiency as a gift or gift tax?, and issue me a 1099. I then will be protected under my homestead exemption and not have to pay a dime. Has anyone else heard of this?

The lender may or may not come after you for deficiencies after a short sale is completed. In some cases they will issue a 1099 at the end of the year and pay taxes on the amount owed. Not sure if homestead exemption protects you from judgments or not, but check out these 2 links they may be more of a help:

Do Homeowners Still Owe Money After a Foreclosure

The Affect Of A Short Sale On Your Credit

[theylive]

Great articles... thanks!