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mabon

1099-C Foreclosure

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I received a 1099-C in my foreclosure last year. The difference in fair market value and the debt owed was a few thousand dollars, so it wasn't a huge tax hit when I filed. With the 1099-C, am I still responsible for the full amount leading up to the foreclosure?

 

This is where I'm getting all confused and flustered. The bank sent my loan to another company after they started the foreclosure. Bank A took the house back and issued the 1099-C. Bank B is listing the foreclosure as pending and past due on my credit report with an amount collecting interest monthly. Now looking at my credit reports, it appears I have a recent foreclosure and 180+ days behind in payments on another property (which is the same property) with another foreclosure on the horizon.

With the 1099-C, am I still responsible for the full amount leading up to the foreclosure?

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No, once a 1099-C has been issued, you are no longer responsible for the debt. I'm not sure the best way to dispute what they're reporting, so I'll let the experts chime in. Be patient. :)

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I pulled out my 2015 tax return and foreclosure file to start making copies. This where everything gets so confusing for me...

 

As I mentioned above, the original bank (Bank A) started the foreclosure process in August 2014. They took the house back July 2015

 

Bank B came into the picture in December 2014. They are also the ones who issued a 1099-c. And mailed a 1099-A. Neither of the 1099's are marked corrected if that hepls.

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I would look online to see if/when a foreclosure sale occurred. I have never heard of a second bank getting involved after a sale. Are you sure the house went to foreclosure sale and is out of your name?

 

If so what Bank foreclosed on you Bank A or B? Based on your dates it should be bank B after Bank A sold them the bad loan but its not really clear.

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August 2014 Bank A initiated the foreclosure

December 2014 Bank B sent a letter they had taken over the account

July 2015 Bank A was granted the foreclosure

August 2015 documents filed with my city transferring the house from us to the bank A's trustee

January 2016 Bank B sent a 1009-a and 1099-c

 

Bank A foreclosed

Bank B sent the 1099's and is the one still reporting open on 2 reports and foreclosure pending on the third

 

Edit - I googled the address for Bank A's trustee. It's bank B

Edited by mabon

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