2nd mortgage was forgiven

mayela

LoanSafe Member
May 20, 2008
245
3
18
Help please, my Moms 2nd mortgage was forgiven last year, her first is current. My mom was going to let her house go but now that the 2nd is gone she can afford her payment. Does the debt forgiveness act apply to the 2nd mortgage even though she was not foreclosed on? Thank You :)
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
Hello Mayela,

Yes, she's still eligible for forgiveness. This applies to principal reductions as well as 2nd mortgage settlements on primary residences. That's great news her 2nd was forgiven before the expiration of the MFDRA!
 

mayela

LoanSafe Member
May 20, 2008
245
3
18
Evan,
Are there tax consequences though? That would defeat the purpose right? She couldnt afford her second.
 

Evan Bedard

Call 1-800-779-4547
Loan Safe Mortgage
Aug 26, 2007
18,837
48
48
San Diego, California
www.LoanSafe.org
She needs to speak with her tax person, did she receive a 1099 for the forgiven amount?