you at foreclosure time, and that gives the impression that they hold all the cards. The truth is, there are laws to protect your interests, even in foreclosure. You have resources and options available to you, even if they’re not readily communicated to you. Facing your options in a foreclosure can feel like confrontation. We’ve been raised to believe that banks and other lending institutions are powerful, faceless adversaries. In that sense, they are unknowable, and it’s easy to fear the unknown. Many homeowners put off contacting their lender because they’re embarrassed to do so. The Freddie Mac/Roper poll also found that homeowners avoid contacting the lender because they don’t believe the lender can help them. Some even believe alerting the lender will accelerate the process of losing their home.
TAX IMPLICATIONS FORECLOSURES
It almost seems impossible that after undergoing the misfortune of a foreclosure, you could get hit with the “double whammy” of having the Internal Revenue Service insist you pay income taxes or capital gains on
the foreclosure transaction. You’ve just had your home taken away from you because you were unable to make all of your mortgage payments on time! How is that a red flag for the IRS? Here’s how it can happen. Your lender originally based your mortgage loan on the value of the property you were buying. When your property is foreclosed, the title changes hands from you to the lender and/or trustee. A new tax assessment is
14
Powered by FlippingBook