Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Has anyone who has been foreclosed on received the form 1099A from their mortgager? I am trying to do taxes and I called the IRS, which by the way one arrogant agent said there were only 3% foreclosures in the country. Anybody know the real percentages?

Amer. Serv. Co. foreclosed on the property Dec. 4th, 2008. Since the foreclosure the property is going downhill.

So do I file or should I extend until I can somehow get that 1099A releasing me from debt? I don't have a job, no unemployment. We are living with family.
I appreciate any insight into this mess.
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Moose
Defrauded wrote:
Has anyone who has been foreclosed on received the form 1099A from their mortgager? I am trying to do taxes and I called the IRS, which by the way one arrogant agent said there were only 3% foreclosures in the country. Anybody know the real percentages?

Amer. Serv. Co. foreclosed on the property Dec. 4th, 2008. Since the foreclosure the property is going downhill.

So do I file or should I extend until I can somehow get that 1099A releasing me from debt? I don't have a job, no unemployment. We are living with family.
I appreciate any insight into this mess.


This isn't legal advice, nor tax advice, but if there was any "forgiven debt" the Mortgage Forgiveness Debt Relief Act lets you exclude any of it from your gross income.  The entity ACQUIRING the property is supposed to issue a 1099A and you use the 982 form.

Again - this isn't legal or tax advice, but keep in mind you can always amend a return, and not getting the documentation from ASC is a valid reason.

Oh, and the person at the IRS that said only 3% of loans were foreclosed on is actually close.  According to the Mortgage Bankers Association, the percentage of loans in the foreclosure process at the end of the fourth quarter was 3.30 percent, an increase of 33 basis points from the third quarter of 2008 and 126 basis points from one year ago. 

Having said that - the foreclosure rate for subprime loans is much higher 13.71 percent.

Moose




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Defrauded
Thanks Moose appreciate you clearing that up.  So have you heard of any of the servicers not forgiving the debt? The IRS said they may even wait and send it next year.


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Moose
Defrauded wrote:
Thanks Moose appreciate you clearing that up.  So have you heard of any of the servicers not forgiving the debt? The IRS said they may even wait and send it next year.




I would only say that they will do only what is in their best financial interest. Do not trust anything they say.

For some time now, the IRS has been giving guidance to servicers of loans in securitized pools that they would not be penalized if they didn't file 1099's. My read on that was that servicers were able to carry two sets of numbers - one they told the borrower was the outstanding debt and another one that was based on what was actually on their books. Submitting a 1099 to the IRS that didn't match what they were claiming in a foreclosure or bankruptcy could expose them to uncomfortable tax reporting conflicts and the IRS capitulated, apparently recognizing that any number the servicer concocted couldn't actually be proven either way.

Again, they will do what ever they have to. And relying on the IRS for guidance has been proven to be wrong in at least thirty percent of the time in even the basic tax questions.

There are tax gurus out there on the 'net, but most of them don't recognize the slimeball side of the mortgage servicing industry. Again, this non-legal advice is to get competent tax counsel (which, if memory serves, is tax deductible).

Moose





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I posted this ? on Credit Info. Center forums, but haven't gotten an answer yet and then seeing this issue raised here I thought I'd ask here, where many have probably faced this issue before.

I need some help....I usually file my own taxes. I use TaxAct.com and filed my Federal return already, already got the refund. I waited to file my state return because we owe $ and I wanted to put it off until it's due, which is next week. I am going on vacation Tuesday, so need to send it off before I leave (my husband wouldn't have a clue to do it LOL)

So here's the issue...last year we lost our home, went from Ch. 13 to Ch. 7. When it was time to get all our tax info. we had nothing from the mortgage companies regarding the loss (1099-A) and went ahead with our tax prep and filed the Federal. Then about 2 weeks ago, around the end of March, we got the 1099-A from the 2nd mortgage company (Wilshire). It states we are not liable for the repayment of the debt. We've gotten NOTHING, nothing, from the 1st mortgage company (Litton) - not even anything regarding the sale of the old house!

Anyway -

Do I need to amend my Federal return? Can I file my state and amend both at a later date, when I'm not so crunched for time? This shouldn't impact us as in owing more, because of the bankruptcy, right? Is there a penalty to the mortgage company for not sending this sooner than the end of March? I'm just so frustrated that they didn't send us the 1099 back in January when everyone else had to get us the info. because this is just confusing to me. My hubby wonders if we even need to include it in our taxes because we aren't liable for the repayment of the debt, but somehow I think the IRS might not see it like that!

I would really appreciate any help/advice anyone might have. Thanks in advance!

P.S.  I wonder if Litton hasn't sent anything because the numbers are so "off" - our $104,xxx loan going from $104K to over $112K after paying on it for 4 years!  The math is so fuzzy I think they are hiding it from the IRS - just a theory...
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