Legal Question in Real Estate Law in Arizona

i want to know if i do a short sale or foreclosure of my property can the lender try to re-coup it's losses from me? I also want to know if there are any taxes that need to be paid. i live in arizona


Asked on 9/22/09, 5:54 pm

1 Answer from Attorneys
Donald Scher Donald T. Scher & Associates, P.C.

With a short sale, the lender cannot come after you for its losses on your loan, but they will send you a form 1099, so that the money you did not repay on your loan will be treated as income to you. Right now, it looks like the IRS will not tax you on that income, they are exempting that income, but that could change. With a foreclosure, there is no 1099, and the lender cannot go after you for the deficiency between what they get for the house and what you owed on the loan.

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Answered on 9/27/09, 6:08 pm


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