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So what happens if you don't receive a 1099-C or 1099-A after a short sale?

Discussion in 'Short Sale Outpost' started by cahomeowner, Sep 24, 2011.

  1. cahomeowner

    cahomeowner LoanSafe Member

    I completed 4 short sales and received 1099-C Cancellation of Debt on all the properties except one in AZ. Anyone know what happens if you don't receive a 1099-C? The 1099-C's I did receive a couple were from the same lender as AZ so I'm not sure why they did not file a 1099-C. Aside from speculation, guesses and opinions does anyone have an official answer? Is the bank trying to keep their option to collect open? why would they do that on this 1 property vs the others from the same lender?
  2. cahomeowner

    cahomeowner LoanSafe Member

    The 1099-C's I did receive were recourse and non recourse loans. Also the values were a lot higher than the one in AZ.
  3. TomEason

    TomEason LoanSafe Guide Staff Member

    cahomeowner

    Thanks for your post. The generally accepted rule is, regardless of what a lender issued 1099 states, that you and your tax person do whatever you deem appropriate. The lender issued 1099s are incorrect or inaccurate about 50% of the time.

    Bear in mind that those 1099s are generated by the lender's system; however the data is entered into the system by a relatively untrained and inexperienced data entry clerk.

    It's important to remember those notices aren't issued by the IRS (even though on an IRS form), and therefore lack the gravitas of an official IRS notice.

    Good luck.
  4. cahomeowner

    cahomeowner LoanSafe Member

    anyone have a similar experience where your lender did not issue a 1099-C?
  5. needclosure

    needclosure LoanSafe Member

    Property forclosed in Oct - still no 1099 received yet...
  6. TomEason

    TomEason LoanSafe Guide Staff Member

    1098s and 1099s are mailed by lenders once a year between January 1 and February 28.
  7. cmass122

    cmass122 LoanSafe Member

    I hope to get mine soon, im about to fax a letter to seretus. I didnt realize thats the NEW IBM LBPS until today

    I assume I am waiting for a 1099-c I just need to make sure I get the form(s) that cancels all debt for non-recourse loans
  8. LoveBOA

    LoveBOA LoanSafe Member

    http://www.loansafe.org/forum/short-sale-outpost/46694-golden-gate-cash-keys-short-sale-etc.html

    I am also curious what happens when you don't receive a 1099. Is there potential for future recourse? I am considering a deal where a funding group is offering to purchase my mortgage and my home stating that I will not receive a 1099. Because they are now the lender and they will not be issuing one. I can them move out of the property and it appears on the books as a sale.

    Link above is the thread I posted about it.
  9. Grease Lightning

    Grease Lightning LoanSafe Member

    my guess is they aren't totally giving up on the deficiency

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