Legal Question in Real Estate Law in California

Why Lender of a short sell does not give 1099-C

Is it by law, Lender has to give 1099-C on Debt Cancellation such as a short sell of the house.

Can they choose to get a another promisory note instead?


Asked on 5/16/09, 6:51 am

1 Answer from Attorneys
George Shers Law Offices of Georges H. Shers

Re: Why Lender of a short sell does not give 1099-C

The lender can do what it wants but if you lack the funds to pay your home mortgage so tha tthe lender approves ashort sale, why would they and you then agree to another debt? The lender would consider the promisory note worthless and would have to write it off later, so why put it on its books now and tie up additional funds? For every debt owed them, they have to have a certain amount of real assets avail.able

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Answered on 5/16/09, 11:42 am


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