Category Archives: Foreclosure
Forgiven debt such as credit card settlements can trigger a tax bill
Getting a tax bill after you’ve gone through foreclosure is like having a bucket of ice water poured over your head after someone has made off with your pants. You’ve lost your home and probably don’t have much money, so why would you owe the IRS anything? Here’s why: The IRS treats forgiven or canceled debt as taxable income. For example, suppose you owe $400,000 on a home that goes into foreclosure, the bank sells it for $300,00 and writes off the rest of your loan. Under the tax code, the $100,000 in forgiven debt is taxable income. In 2007, […]
U.S. Bankruptcy Judge Questions Legal Claims of MERS
On Thursday, February 10th, a federal bankruptcy court judge issued an opinion offering a scathing critique of the Mortgage Electronic Registration Systems, or MERS, the electronic-lien registry system built by the housing-finance industry to facilitate the bundling and selling of pools of mortgages. The decision by U.S. Bankruptcy Judge Robert E. Grossman in Central Islip, N.Y., didn’t change the outcome of the borrower’s foreclosure proceeding. The foreclosure had been approved earlier by a state court, and the judge ruled that he didn’t have the authority to stop it. But that didn’t stop [Judge] Grossman from offering an opinion that he […]
MERS, the Mortgage Holder You Might Not Know
FOR more than a decade, the American real estate market resembled an overstuffed novel, which is to say, it was an engrossing piece of fiction. Mortgage brokers hip deep in profits handed out no-doc mortgages to people with fictional incomes. Wall Street shopped bundles of those loans to investors, no matter how unappetizing the details. And federal regulators gave sleepy nods.That world largely collapsed under the weight of its improbabilities in 2008.But a piece of that world survives on Library Street in Reston, Va., where an obscure business, the MERS Corporation, claims to hold title to roughly half of all […]
J.P. Morgan Apologizes for Military Foreclosures
WASHINGTON—A J.P. Morgan Chase & Co. executive, at a U.S. House hearing Wednesday, apologized for wrongly foreclosing on military families and overcharging thousands for mortgages, as lawmakers weigh whether new legislation is needed to help prevent military personnel from losing their homes and getting hit with high interest rates. “We failed to comply with aspects of the law,” Stephanie Mudick, executive vice president of J.P. Morgan’s office of consumer practices, told the House Committee on Veterans’ Affairs. She said the company is embarrassed over the matter, and apologized for the bank’s errors. “We deeply regret that service members have been […]
Bank of America: Bank of America Creates New Unit, Names Foreclosure Czar
Bank of America Corp appointed on Friday a new foreclosure and loan modifications czar, and created a new unit to oversee problem home loans in a bid to sort out its ongoing foreclosure issues, becoming the first large U.S. bank to do so.The new unit creates a seventh major division at the bank reporting directly to Chief Executive Brian Moynihan, an indication that the largest U.S. mortgage servicer is attempting to be more aggressive in resolving its problem loan portfolio.Analysts said the move is a signal that major U.S. mortgage lenders have not yet turned the corner on dealing with […]
