Need some help here. A few years ago my mother- in-law had to let her house go back to the bank after her husband died. She struggled to keep up with the high payments and could not do it. They have since sold the house to someone else for a low value. I believe this was last year.
This year she got a W-2 from them listing the excess amount as an income. She has to pay over $4000 in taxes plus what she had on her return as a credit. I understand that this is considered an extra income and she is liable.
What I am wondering is this the end of the whole house nightmare or can she still be sued for the remaining amount? We live in PA and I believe it has been near 4 years since she left the house go. I think the loan was through a mortgage company. What happens to the remaining balance? Does the mortgage company swallow the loss or can she yet be sued?
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If the last payment has been made within the SOL period, then she may be sued for the remaining debt else she is not required to pay back the remaining part of the debt.As far as I know, if she does not pay the remaining part of the debt, the mortgage company may send her a 1099C form which has to be filled up and send to the creditor. She may be required to pay taxes on the portion of the debt which she has not repaid.
Justin, I actually think this is what happened. This is where the taxes came in I believe. By paying these taxes does this restart the SOL or does a payment have to be made to the creditor? I can not understand why a bank would not pursue the matter and get some of their money back. By looking at the amount she owes on taxes due to letting the house go the bank has got to be out of quite a bit of money. How do they recoup those losses?
Mortgage question
I have a house in VA which I owe 219000 on. I lost my job but got another one in Houston. I moved there last month but my house in VA is standing empty--real estate agent has had no inquiries and we also listed it for rent--no takers. This is going to be very hard to carry since I have to pay a pretty big rent for my family in TX. Any ideas what I should do