Capital Gain Tax Treatment for Non-Recourse Loans

By John Reynard III, Esq., LL.M. | Published: February 24, 2011

The Cancellation of Debt Provisions found in the Mortgage Debt Relief Act of 2007 may not apply to Capital Gains!

Tax season is right around the corner and with it many questions from individuals who have recently short sold a house or have been foreclosed on.  When former President Bush signed the Mortgage Debt Relief Act of 2007, its general purpose was to allow taxpayers to exclude income from the discharge of debt on their principle residence.  However, when you lose a home to foreclosure and are not personally liable for the debt, the IRS treats the transaction differently.  Instead of using the auction sale price, the IRS only looks to the full amount of the outstanding debt immediately before the transfer.  ”This is true even if the FMV of the property is less than the outstanding debt immediately before the transfer.” (See Publication 4681, Page 11, Column 3, “Amount Realized on a non-recourse debt.”)

This implies that you may have to look to other tax provisions in order to avoid having a large tax liability as a result of a foreclosure.  For example, according to an Internal Revenue Bulleting issued by the IRS:

“IRC Section 121 provides that a taxpayer may exclude from gross income up to $250,000 of gain on the sale or exchange of a principal residence if certain conditions are met.  In certain circumstances, a married individual filing a joint return for the taxable year of the sale or exchange may exclude from gross income up to $500,000 of gain.  This exclusion also applies to the sale or exchange of stock held by a tenant-stockholder in a cooperative housing corporation (as defined in Section 216) and may apply to the sale or exchange of a remainder interest in a principal residence if the taxpayer so elects.  See Code Section 121(d)(4) and (d)(8)” (See Internal Revenue Bulletin: 2007-4, found at www.irs.gov/irb/2007-04_IRB/ar09.html).

This means that in some cases a homeowner needs to look to a completely separate area of the tax code in order to determine whether or not there will be tax implications from a foreclosure.

Another result of this disparity in tax treatment means that the Mortgage Forgiveness Debt Relief Act of 2007 may not apply to a foreclosure where the homeowner was not personally liable on the loan.

Form 1099-C, Box 5

Take a look at Box 5 on your form 1099-C.  It asks the following question: “Was borrower personally liable for repayment of the debt?”  There are two possible answers that your lender can select from when issuing this form to both you and the IRS.  Would it be surprising to learn that depending on which box is selected, the type of tax treatment by the IRS cold be completely different?

Don’t let this type of tax issue come as a surprise.  Make sure to consult with a tax professional before allowing your house to be short sold or foreclosed on.  In some cases, you can structure or negotiate a transaction in order to avoid or minimize future tax liabilities.

Bankruptcy as a potential solution to tax issues.

When determining possible solutions to a distressed mortgage, bankruptcy can often facilitate an exit strategy.  See our blog here on ways to use bankruptcy to save your home.

Contact me at jsr@qsrlaw.com or call my office at (619) 231 – 6655 x 104.

John S. Reynard III, Esq., LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Deficiencies, Foreclosure, Lenders, Short Sales, Tax | Tagged , , , , , | Leave a comment

Tax Results of Foreclosure and the Cancellation of Debt

By John Reynard III, Esq., LL.M. | Published: February 23, 2011

What is debt cancellation and why is it such a common theme in today’s real estate and tax world?

In the current economic climate, thousands of homeowners are receiving reports from lenders showing large income amounts as a result of the Cancellation of Debt.  January 31 was the date by which lenders were obligated to send out Form 1099-A or Form 1099-C (see Canceled Debt and Form 1099-C).  These forms are sent to both the IRS and the borrower.  You can expect to receive one of these forms if you have had either a foreclosure or other transaction (i.e., short sale, deed-in-lieu of foreclosure, etc.) which may have led to an amount of debt being canceled.

Debt cancellation is found in Section 61(a)(12) of the Internal Revenue Code.  Commonly referred to as COD (“Cancellation of Debt”) income.  Originally this type of income was recognized by the courts and then later codified in Section 61(a)(12).

The premise behind this form of income is that when a a loan is given, there is no “accession to wealth” since there is an obligation to repay it.  Meaning that, although a taxpayer has an increase in assets by receiving property or money, there is an offsetting liability that is represented by the borrower’s obligation to pay the lender back.  However, when a loan, or portion of a loan, is later forgiven, this gives rise to an “accession to wealth”.  It is this rise in assets or tax benefit that a taxpayer receives which is the motivation for the government’s tax position.

Amounts listed on Form 1099-C may be contested (see Question #6 at www.IRS.gov here).

The following is an excerpt taken directly from the IRS website:

“6.  I don’t agree with the information on the Form 1099-C.  What should I do?

Contact the lender.  The lender should issue a corrected form if the information is determined to be incorrect.  Retain all records related to the purchase of your home and all related debt. (see http://www.irs.gov/newsroom/article/0,,id=174034,00.html).”

There are several provisions in the tax code that provide ways to either minimize or eliminate this type of income tax.  Be careful to get competent tax advice prior to engaging in a transaction.  Once a foreclosure has been completed it may be too late to avoid a tax liability.  Please contact your tax advisor or our offices as soon as your are aware that you may be faced with some form of debt cancellation.

Contact me at jsr@qsrlaw.com or call my office at (619) 231 – 6655 x 104.

John S. Reynard III, Esq., LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at jsr@qrlawfirm.com.

Posted in Bankruptcy, Deficiencies, Foreclosure, Lenders, Loan Mods, Short Sales, Tax | Tagged , , , , , , , , , , , | 1 Comment

How to Avoid/Strip A 2nd Mortgage In Chapter 13 Bankruptcy

By lbq | Published: February 23, 2011

California Central Bankruptcy District Procedure

While pumping money into bankers’ pockets, the mortgage meltdown has left millions of homeowners with first mortgages that exceed the value of their homes and second mortgages that are entirely unsecured.  The economic downturn is sending many of these homeowners into bankruptcy.  A narrow ray of light in the Central District allows some to “avoid” or “strip” a second mortgage when the home’s value is less than the first mortgage – if the homeowner follows the correct procedures.

Form 4003-2.4 is Now Mandatory

The California Central Bankruptcy district, the procedure for doing this has become clearer effective 12/11/2010.  The CACB has adopted a form 4003-2.4, called “Debtor’s Motion to Avoid Junior Lien on Principal Residence” is now available on the court’s website at www.cacb.uscourts.gov and is set up to clearly present the required information for a bankruptcy judge to evaluate the case and determine whether the homeowner is entitled to strip the second mortgage.

Lien-Stripping Not Guaranteed

Use of this form DOES NOT guarantee that the lien will be stripped, but failure to use the correct form, including proper proof of service, will result in the motion not being set for hearing.  In other words, use of the form and proper procedures is MANDATORY.

Several points that debtors and their counsel should remember regarding the process include:

  1. In addition to the form itself, the submission must include evidence that supports the contentions made in the motion.
  2. The valuation of the property is an essential fact that the debtor must establish with permissible, credible evidence.  (An Internet reference such as Zillow.com alone is not sufficient.)
  3. The lien-holder must be properly served in accordance with Rule 7004(b)(3) and 7004(h).  For FDIC-insured institutions, further information is available at http://www2.fdic.gov/idasp/main.asp , and refer to our other postings.
  4. The debtor’s responsibilities include submitting an order for the bankruptcy judge to sign.  This proposed order must be submitted within 7 days and must be on form 4003-2.4.

Does First Mortgage Exceed Home Value?

Remember that the essential question in this process is whether the amount owed on the first mortgage is more than the value of the house.  For anyone who bought a home in the last few years with 80-20 financing, a market decline of 20% or more would produce that result.  If there are additional penalties, fees, or arrearages on the 1st mortgage, a smaller decline could also produce that result.  However, general market trends are not sufficient to support the motion.  You will need specific information about the property showing the current value and the current debt amounts .

Lien-Strip In Chapter 13 NOT Chapter 7

Also remember that the lien-stripping / lien avoidance relief discussed here is available in Chapter 13, not in Chapter 7.  Debtors filing under Chapter 7 should disregard this posting.  Furthermore, if a Chapter 13 has been filed following a Chapter 7 by the same debtor (sometimes called a “Chapter 20”), lien stripping should not be allowed as the debtor is not entitled to a discharge in the subsequent Chapter 13 filing.

Final Disclaimer: THIS IS NOT LEGAL ADVICE

PLEASE DO NOT RELY on this posting as legal advice.  The foregoing is intended as general information and is distributed for marketing purposes only.  The rules and procedures in Bankruptcy are complex and we strongly advise debtors to obtain qualified counsel.  If you have any questions or comments, please contact me, Lincoln Quintana, by email at lbq@qsrlaw.com or by telephone at 619.600.0093.

The foregoing information is presented by Quintana | Reynard, APC as a marketing and information service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email me at lbq@qsrlaw.com.

Posted in Bankruptcy, Chapter 13 | Tagged , , , , , | 2 Comments

Chapter 13 Bankruptcy

By John Reynard III, Esq., LL.M. | Published: February 15, 2011

Many homeowners looking to save a home that is in foreclosure look to filing a Chapter 13 bankruptcy.  Filing Chapter 13 can be an effective way to give a homeowner an opportunity to halt foreclosure proceedings and enter into a repayment plan with a lender.

There are many requirements that need to be met in order to qualify for a Chapter 13 bankruptcy filing.  Two of these requirements involve debt limitations and regular income.  Additionally, only an individual may file for a Chapter 13 bankruptcy.

A debtor must have less than $1,010,650 of secured debt and less that $336,900 of unsecured debt.  These debt limitations eliminate many homeowners who have large mortgages.

Another potential benefit of filing a Chapter 13 bankruptcy rather than a Chapter 7 is that more debts are eligible for a discharge in a Chapter 13 than in a Chapter 7.

A very popular transaction that many of our clients are seeking to engage in is a lien strip of the second mortgage on a residence.  With so many homes being so far underwater these days some second mortgages are completely out of any equity.  This means that if the property were to be sold, there would not be any equity (i.e., money) available to pay any portion of the second mortgage after paying off the first mortgage.  If this is the case, there is an opportunity to strip the second mortgage from the property and have it grouped with other unsecured creditors.

If you are interested in learning more about filing a Chapter 13 bankruptcy please contact our offices.  We are conveniently located in San Diego and Orange County.

Contact me at jsr@qrlawfirm.com or call my office at (619) 231 – 6655 x 104.

John S. Reynard III, Esq., LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Bankruptcy, Chapter 13, Deficiencies, Foreclosure, Lenders, Loan Mods, Short Sales, Tax | Tagged , , , , , , , , , | Leave a comment

Specific Forms Mandatory after 3/14/2011 for Lien-strip Of Junior Mortgage in California Southern Bankruptcy District

By lbq | Published: February 14, 2011

Bankruptcy Court in Southern California Adopts Rule Establishing Procedure for Lien Stripping in Chapter 13 Cases

In San Diego, the bankruptcy court is slated to adopt local rules that include a mandatory form for “stripping” liens from a Chapter 13 debtor’s primary residence.  This rule applies to the California Bankruptcy southern district (see below **).

“Lien stripping” refers to a determination by the bankruptcy court that a loan that claims to be secured is in reality unsecured, which can occur in the case of a home mortgage if the home was heavily financed with multiple mortgages, the value of the home dropped, and the current value is less than the first mortgage: in that case, the second mortgage would be effectively unsecured and a candidate for lien-stripping.

Lien stripping is sometimes also referred to as a motion to “value collateral” because it involves determining that a seemingly secured lien is in reality unsecured due to the value of the collateral being so low that there is no security for junior lienholders.

The new rule (Rule 3015) was proposed on January 20, 2011 and is scheduled to go into effect starting March 14, 2011.  The proposed rule including mark-ups and redlining can be found in a general order at http://www.casb.uscourts.gov/pdf/announcements/GO176.pdf .

Rule 3015 covers several aspects of the process.  The essential points are:

  1. The lien strip is to be done through a noticed motion brought by the debtor
  2. The debtor’s attorney must initiate the process promptly by filing the motion – If not, the debtor’s plan may be denied by the court.
  3. The motion must be brought using a specific court-approved form.
  4. In addition to the required data, the debtor must submit documentation that shows that the motion has merit.
  5. If a creditor wishes to oppose the motion, the creditor must respond prior to the hearing date, 28 days after service of the motion.
  6. If the debtor prevails on the motion, the debtor must submit a proposed order for the bankruptcy judge’s approval, and serve it upon the creditor.

While this procedure requires substantial effort by the debtor, it is in fact a benefit to debtors seeking lien stripping, because it sets up a well-defined set of requirements.  For debtors who meet the requirements and who are prepared to do the work to comply with the rule, this should make the process much more predictable.

NOTE:  DO NOT RELY on this posting as legal advice.  The foregoing is intended as general information and is distributed for marketing purposes only.  The rules and procedures in Bankruptcy are complex and we strongly advise debtors to obtain qualified counsel.

** NOTE: The California Southern Bankruptcy District includes San Diego, Escondido, Oceanside, Poway, El Cajon, Chula Vista, El Centro, and all other cities in San Diego County and Imperial County.

Posted in Bankruptcy, Chapter 13 | Tagged , , , , | Leave a comment

Remove 2nd Mortgage Debt (Lien-strip)

By lbq | Published: February 9, 2011

Upside-down Homeowners May Get Right-side up In Chapter 13

If you are one of millions of homeowners whose homes are now worth less than you owe, Chapter 13 may offer some help.  A procedure known as “lien-stripping” might be available to you if:

  1. You have 2 (or more) mortgage loans on your home,
  2. You have less than $1 million in secured debt AND
  3. Your home’s value is not greater than the first mortgage.

If lien-stripping applies in your case, and you submit the proper motions, a judge can determine that the second mortgage is not truly a “secured lien” because the value of the security (your home) is less than the first mortgage, and the second lien-holder has no security interest.  The second lien can then be “stripped” from the home, making it an unsecured debt.

This procedure is not easy or without consequences, however.  First, you need to file bankruptcy, and you need to qualify to file under Chapter 13.  Then,  you need to follow detailed procedures that differ from court to court and from judge to judge in bankruptcy cases.  The required procedures are currently undergoing change in many courts including the bankruptcy courts for Central California and for Southern California.  (See our postings regarding new lien-strip rules for the California Southern District and the California Central District for more details.)

Be prepared for an uphill battle.  Lien-stripping is not easy when it comes to personal residences.  Historically, the Bankruptcy Court has no jurisdiction over home loans.  Bankruptcy Code 11 U.S.C. Section 1322(b)(2) provides that a Chapter 13 plan may modify the rights of secured creditors, with the exception of a claim secured only by a security interest in real property that is the debtor’s principal residence.  In other words, while a bankruptcy judge has authority to order all the other creditors to abide by a debtor’s repayment plan, that judge cannot enforce a modification of terms on a note secured by a debtor’s primary residence.

This limitation on the bankruptcy court jurisdiction reflects deference by the legislature to the sound judgment of the mortgage industry.  The theory was that lenders would not make irresponsible loans, and that lenders would be able to give the best rates to borrowers if they controlled the loans outside the bankruptcy court.  The recent mortgage meltdown and subprime disaster have shown that lenders were in fact irresponsible, causing first a real estate bubble and then a steep decline.  Now, with an estimated 12 million homes upsidedown and at risk of foreclosure, bankruptcy court intervention is inevitable in many cases.

If handled correctly, a filing under Chapter 13 of the Bankruptcy Code can provide important protections to upsidedown homeowners.

NOTE:  DO NOT RELY on this posting as legal advice.  The foregoing is intended as general information and is distributed for marketing purposes only.  The rules and procedures in Bankruptcy are complex

Posted in Bankruptcy, Deficiencies, Lenders | Tagged , , , , , | 1 Comment

Insolvency, Bankruptcy, and the Mortgage Forgiveness Debt Relief Act of 2007

By John Reynard III, Esq., LL.M. | Published: February 1, 2011

This is a brief description of cancellation of debt income and some of the tax provisions that are available to minimize or eliminate this type of tax.  Be aware that this is a very high level discussion and should not be relied on for your individual situation.  However, our firm is available to provide a consultation to address your specific situation in greater detail.

Cancellation of debt income is beginning to gain more publicity as many taxpayers are receiving Forms 1099-C and 1099-A.  There are many great resources which provide guidance for taxpayers as to how to handle these forms and what exactly they mean.  See my brief video here.

In addition to an understanding of what this Form 1099-C means, it is important to determine whether or not there are any tax rules available to help you minimize or eliminate this tax liability.

Three methods of addressing this tax are: Insolvency, Bankruptcy, and the Mortgage Forgiveness Debt Relief Act of 2007.  Each of these may provide you with a means to ease the tax burden of having a significant amount of canceled debt income to report.  These three methods are not the only ones available but are common ways for individuals to avoid having to pay income tax from debt having been cancelled.

Insolvency is described in Section 108 of the Internal Revenue Code and can be used to offset a portion, or in some cases all, of a tax liability that may arise from cancellation of debt income.  Insolvency is determined by comparing your assets and liabilities in order to determine whether or not you are considered “insolvent” and therefore able to avoid paying this tax.  To the extent that you are insolvent, you may be able to exempt some or all of your cancellation of debt income.

When cancellation of debt income occurs in the course of certain bankruptcy events, this type of  income may be exempted from an individual’s income tax.  Some of the factors to consider are the timing of the bankruptcy as well as the type of asset that is secured to the debt which is going to give rise to the cancellation of debt income.

Lastly, the Mortgage Forgiveness Debt Relief Act of 2007, which was enacted Dec. 20 of 2007, allows some taxpayers to exclude debt forgiven on a principle residence if the balance of the loan is $2 Million or less.  However, these limits change for a married person filing a separate return.  See this article found on the IRS website for more information on the issue of mortgage debt that is forgiven.  It is important to determine whether or not your house qualifies as a principle residence.  Additionally, an analysis should be performed if you have refinanced or took cash out to determine if some of the current balance does not qualify for the exclusion.

Please contact our offices and schedule a consultation.

John S. Reynard III, Esq., LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Bankruptcy, Deficiencies, Foreclosure, Lenders, Short Sales, Tax | Tagged , , , , , , | Leave a comment

Strategic Defaults

By John Reynard III, Esq., LL.M. | Published: January 27, 2011

What is a “Strategic Default”?

As individuals face increasing mortgage payments and decreasing home values, many home owners are beginning to look into the possibility of defaulting on a mortgage as an available option.

A strategic default essentially is a decision made by a borrower to stop making payments on a debt even though s/he has the ability to continue making payments.

After having exhausted other possible remedies to mitigate a loan whose amount is greater than the value of a property, some homeowners are incorporating default as a means of solving cash flow issues.

In addition to the ethical issues surrounding strategic defaults, careful planning is necessary to determine whether a loan is recourse or non-recourse.  This analysis basically determines whether or not a lender has the ability to pursue a claim against the borrower for the defaulted debt.  In the event that a debt is recourse, a lender may have the ability to go after other assets of the borrower to cover losses incurred  from the debt.

Due to the possibility that a lender may be able to collect on some recourse loans, careful planning should be made in order to calculate the impact of a default.

TAX ISSUES: In addition to the possibility of personal liability for defaulting on a mortgage, there are tax implications as well.  The amount of debt that is forgiven may be considered income by the IRS.  There are several tax code provisions that may alleviate or minimize this income tax (often referred to as “phantom income”).  One such provision is the Mortgage Forgiveness Debt Relief Act of 2007 which currently is set to expire in December of 2012.  Information can be found on the IRS website here.

Please contact our offices for more information.

John S. Reynard III, Esq. LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Deficiencies, Foreclosure, Lenders, Loan Mods, Short Sales, Tax | Tagged , , , , , , , , , , , , | Leave a comment

Bankruptcy Planning and Short Sales

By John Reynard III, Esq., LL.M. | Published: January 19, 2011

Is bankruptcy the best option for you?  When faced with a looming foreclosure many people rush to file bankruptcy.  Although this may be an effective way to put a temporary halt on the bank’s ability to sell your house, it is not always the best decision when factoring the rest of your financial scenario.

First of all, there are numerous chapters in bankruptcy that are available when filing.  Each chapter can have drastically different impacts on the status of your mortgage and other debts.   For example, in Chapter 13 and some other chapters, there is a potential to lien strip.  Lien stripping is allowed only in certain cases depending on the type of collateral as well as the particular chapter of the Code under which the discharge is granted.   However, depending on an individual’s specific scenario, it is important to look at all options.

With the rise in popularity of Short Sales, individuals whose only major debt is a mortgage may be able to avoid bankruptcy by successfully negotiating a work out with their banks.  If the bank will agree to take a short payoff in satisfaction of the debt and not retain any rights to a deficiency, a homeowner may avoid any need for bankruptcy.  These are complicated transactions however, and need to be engaged in carefully.  Be careful of scammers who may not have your best interests in mind.  Have an attorney review any documents before you sign them.  Not only are there issues regarding the debt itself, but there are significant tax implications to both short sales and bankruptcies.  Be sure to consult with a tax professional so that you may make an informed decision.

In some situations, bankruptcy is a great solution to get out from under excessive debt that is in default or imminent default.  Bankruptcy can provide that “fresh start” which so many Americans are looking for in these tough financial times.  However, in other situations, you may be able to work around your debt without having to file bankruptcy.  Do your research.  My offices are available for consultations.  Contact me at jsr@qsrlaw.com or call my office at (619) 231 – 6655 x 104.

John S. Reynard III, Esq., LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Sarte | Reynard LLP as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Sarte | Reynard LLP is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Bankruptcy, Deficiencies, Foreclosure, Lenders, Short Sales, Tax | Tagged , , , , , , , , | Leave a comment

Bank Lost Your File?

By John Reynard III, Esq., LL.M. | Published: December 20, 2010

Why is it that so many files seem to get lost by the banks as they process paperwork these days?  It seems as if it has become the norm for a bank to lose a homeowner’s file.   If you have had an experience with a bank losing your file please send us a comment or email.

Some of the scenarios that we have seen include:

  • Fax Numbers are changed;
  • A particular department no longer services this type of file;
  • Faxes take several business days to upload into computer systems;
  • Internal systems are not integrated so files are not transferable.

When dealing with a person’s home, often you are dealing with the largest investment of their life.  The amount of stress and panic that we see on the part of people who are close to losing their home is intense.  Legal fees add up quickly and many individuals are not capable of retaining an attorney to help with these issues.

There are public services available that are funded by the government to help homeowners in distress.

One government resource is www.hud.gov.  This is a useful tool to start the process of dealing with housing woes.  Feel free to contact us if you have further questions or please post a comment to share a story you may have.  Our firm has focused on the commercial sector of real estate, however, in certain unique instances, we have been able to help residential homeowners as well.

John S. Reynard III, Esq. LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Deficiencies, Foreclosure, Lenders, Loan Mods, Short Sales | Tagged , , , , , , | Leave a comment

Canceled Debt and Form 1099-C

By John Reynard III, Esq., LL.M. | Published: December 14, 2010

(See our video on this topic here.)

The IRS describes canceled debt accordingly:

“Generally, if a debt for which you are personally liable is canceled or forgiven, other than as a gift or bequest, you must include the canceled amount in your income.  A debt includes any indebtedness:

  • For which you are liable,
  • Subject to which you hold property.”

(Taken verbatim from IRS Publication 4681, Section1. Found at www.irs.gov/pub/irs-pdf/p4681.pdf)

This means that when you lose your home in a foreclosure or sell it for less than the amount owed (i.e., short-sale), you may end up with taxable income.  If this is something that happened to you in the last year or two you may expect to receive, or have received, Form 1099-C from your lender.  You may have also received Form 1099-A, which I discuss briefly below as well.

What is a Form 1099-C?

A Form 1099-C (“1099-C”) is issued by a lender to both the IRS and the debtor when a debt is cancelled or forgiven.  It can be issued for many different types of debt.  For example, if a home loan goes into default and a bank takes back the house and forgives the remaining balance on a loan, that bank may issue a 1099-C and send a copy to both the IRS and the debtor.  Even if the bank fails to issue a 1099-C, any canceled debt must still be reported on your tax return.

A 1099-C provides information that is needed to calculate the amount of income that is generated by debt forgiveness.  Some of the information listed is:

  1. The date the debt was canceled;
  2. The amount of the debt canceled (Contact your creditor if you do not agree with this amount);
  3. Interest, if it was included in the canceled debt;
  4. Description of the debt;
  5. Whether or not you were personally liable for repayment of the debt when the debt was created or, if modified, at the time of the last modifications (i.e., Recourse vs. Non-Recourse Debts);
  6. Whether or not the debt was canceled in a bankruptcy proceeding;
  7. Fair market value (FMV) of property foreclosed or abandoned in connection with the cancellation of debt.

Be aware that your lender may also issue you a 1099-A,  which is the form that the IRS requires for abandonments.  However, if the debt is cancelled, the lender can include the information about the abandonment in Form 1099-C instead of Form 1099-A.  (See www.irs.gov/pub/irs-pdf/p4681.pdf , Section 3, Abandonments.)

Both Form 1099-A and 1099-C  are to be furnished to the borrower by January 31, 2011.

What happens when a bank issues a 1099-C?

By law, when a lender cancels a debt over $600 it is required to report the amount of the forgiven debt to both the debtor and the IRS.  Copy B of the form must be sent to the borrower by January 31, 2011. Copy A of the form must be filed with the IRS by February 28, 2011 or by March 31, 2011 if filing electronically.

When you receive this form from your lender there are certain reporting requirements that should be met in your tax return.   Contact the IRS or a tax attorney or CPA in order to determine the effect that this income will have on your annual taxes and whether or not an exclusion will apply to your situation.

There are several exclusions that can eliminate or at least lessen the amount of tax that you are required to pay when faced with Cancellation of Debt Income.  Some of these are:

  1. Deductible Debt
  2. Qualified Principal Residence Indebtedness
  3. Bankruptcy
  4. Insolvency

Each of these exclusions require careful analysis as well as different reporting requirements.  Make sure to meet with a competent tax advisor as the IRS can assess penalties and interest on amounts deemed owed that you do not report, or report incorrectly.

Remember that it is better to address tax issues as they arise as opposed to expecting that they will go away by ignoring them.

Short sales and 1099-C’s

This is a very involved and complicated area of tax and contract law.  However, I would like to quickly explain the implication of the real estate agent’s comment that he had yet to have a client receive a 1099-C.  First of all:

Question:    Why would someone receive a 1099-C?

Answer:      The debt is canceled or forgiven and does not need to be paid back.

Question:    So what is a possible implication of a bank not issuing a 1099-C, as was the case with this real estate agent’s clients?

Answer:      THE BANK HAS NOT CANCELED THE DEBT!

This means that this bank may still consider the debt collectible and has a period of time where it can start collection activities.  This is a very tricky area of real estate and tax law.  Be extremely careful when signing a short sale approval letter to ensure that you are not agreeing to pay back the deficient amounts (See my Blog on Deficiency Judgments).

There are several statutory protections for homeowners who are unable to pay their mortgage(s).  Make sure that you do not inadvertently waive one of these protections when entering into a contract with your bank (i.e., in a short sale approval letter).

Lastly, look carefully at what you are signing.  Notice that your real estate firm likely is indemnifying itself in the case that the bank comes after you in the future.  These are major transactions and it is important to be able to move on once the transaction is over, rebuild your credit and work towards a more stable financial life.  This may not be possible if you allow your bank the right to collect on amounts owed and unpaid.

Remember the importance of prudent planning.  Carefully informed decisions are critical in these large transactions.  Know your rights and be careful to exercise them.  Get key points in writing.  If the lender or your agent refuses to put something in writing it may be more difficult in the future to prove what exactly was agreed upon.

For questions please email me directly at jsr@qsrlaw.com.  Or feel free to call my direct line at (619) 630 – 2688.

John S. Reynard III, Esq. LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.


Posted in Bankruptcy, Deficiencies, Foreclosure, Lenders, Short Sales, Tax | Tagged , , , , , , , , , | 1 Comment

Should I Incorporate?

By John Reynard III, Esq., LL.M. | Published: December 9, 2010

Frequently clients ask if they should incorporate.  And if so, what type of entity should they choose.  There are many benefits to incorporating your business.  Some of the benefits of incorporating are:

  • Personal Asset Protection
  • Credibility in the Marketplace
  • Marketing purposes
  • Protect the name of your business
  • Perpetual Existence
  • Tax Purposes
  • Raising Capital

However, here are some of the problems that clients bring up with me regarding incorporating:

  • Retention of an attorney (i.e., paying attorney’s fees)
  • Minimum Filing Fees
  • More complicated tax filings

At a minimum, a little research seems to me the most prudent way to approach these questions.  There are several different types of entities that will provide you with a lot of the benefits of incorporating.  There are types of partnerships that might give you better tax results and still provide you with limited liability.  However, there are certain types of transactions that would never be structured as partnerships with the right planning.

I learned early on was that it is usually more efficient to do the research and make informed decisions than trying to pinch pennies and having to unwind transactions.  For example, if you plan on bringing on investors who desire to hold their ownership of your company through an LLC, it is important to know that you cannot be an S corporation.  If this happens you will automatically become a C corporation.  All of a sudden you are now faced with having two levels of tax.  The costs of undoing this transaction can be devastating to a small business as not only the business itself, but the owners as well, may have to refile prior year tax returns.

Be prudent with your decisions.  Take the time to determine the long term effects of the type of entity that you set up.   Remember that careful attention to these early decisions can make future success that much more enjoyable.

Call or email for a consultation.

John S. Reynard III, Esq. LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Business, Incorporating, Pro Bono, Tax | Tagged , | Leave a comment

Deficiency Judgments

By John Reynard III, Esq., LL.M. | Published: December 8, 2010

What is a deficiency judgment?  The statutory definition of a deficiency judgment is: “a judgment against the trustor for the difference between the unpaid balance of the secured debt (plus expenses) and the amount produced by the sale or the fair value of the security, whichever is greater.” (California Code of Civil Procedure §726(b)).

Now what does that mean???

The effect of a deficiency judgment is that a lender can engage in collection activities if the amount of money generated from a sale is not sufficient to cover the balance of the loan.  Remember that the balance of the loan can oftentimes include the costs associated with collection activities in addition to the principle balance of the loan (i.e., penalties, interest, attorney’s fees, etc.).   With the high price of California real estate, these amounts can quickly reach tens or even hundreds of thousands of dollars.

There currently are large waves of deficiency judgments in both residential and commercial real estate being attained by lenders.   Protections from lenders may exist, but careful examination of applicable laws and procedures is imperative to provide effective representation.

California has a number of statutes (some of which date all the way back to the time of the Great Depression) that may protect you from these types of money judgments.   Some of the law in this area is fairly settled and in some cases a determination as to whether or not you are truly liable can quickly be made.  However, in other cases, it can be more difficult to make a definitive determination.  Attorneys are not in complete agreement as to how certain mortgages will be treated as they relate to lenders seeking money judgments from borrowers in both residential and commercial transactions.  However, there is developing case law that should ultimately provide guidance in these unsettled and undecided areas of law.  There are also a number of proposed statutes that are currently working their way through the California Legislature (i.e., CCP §580e).

Additionally, many banks are requiring borrowers to waive certain rights that provide protection from deficiencies as a condition to approve a particular mitigation transaction (i.e., short sale, deed-in-lieu of foreclosure, payment plans, mortgage workouts, etc.).

Some terms to look out for are “purchase money” ; “statutory foreclosure” ; “one-action rule” ; “judicial foreclosure”, “guaranty”, etc.  These are some of the many terms and phrases that are quickly becoming common parlance in every-day business and private conversation.  Each of these terms may signify an important factor in the analysis of whether or not a lender can successfully acquire a deficiency judgment from a borrower.  Before signing any documents to facilitate a transaction it is helpful (if not imperative) to have an attorney review the paperwork in order to avoid waiving important rights or agreeing to onerous terms.

For questions please email me at jsr@qrlawfirm.com.  Or feel free to call my direct line at (619) 630 – 2688.

John S. Reynard III, Esq. LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Bankruptcy, Deficiencies, Foreclosure, Lenders, Loan Mods, Short Sales, Tax | Tagged , , , , , , , | 2 Comments

Halt In Foreclosures

By John Reynard III, Esq., LL.M. | Published: December 8, 2010

Over the past few months, banks have admitted that hundreds of thousands of homes may have been foreclosed improperly and not according to the required legal procedures.  Many major lenders have halted foreclosures in 23 states, Bank of America has stopped all foreclosures, and attorneys general from all 50 states are escalating efforts to stop foreclosures nationwide.

What does this mean for homeowners?  Three things:

  1. If procedures were not followed and your home was sold, the foreclosure was improper and may be subject to rescission (restoring the title to you), or you may be entitled to damages from the lender or trustee.
  2. If procedures were not followed and your home has not yet been sold, the lender cannot legally continue the foreclosure without re-starting it and doing it correctly.
  3. If foreclosure has not commenced and the lenders do not follow correct procedures, the foreclosure will be improper and may be stopped or invalidated by a court.

If you or someone you know is facing foreclosure or has suffered foreclosure, it may be worthwhile to carefully audit the foreclosure paperwork and determine if the foreclosure was done in violation of the state laws.  Please contact me at jsr@qrlawfirm.com.

John S. Reynard III, Esq. LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.


Posted in Bankruptcy, Deficiencies, Foreclosure, Lenders, Loan Mods, Short Sales, Tax | Tagged , , , , , , | 1 Comment

Bankruptcies and Home Mortgages

By John Reynard III, Esq., LL.M. | Published: November 29, 2010

A common question today is whether or not bankruptcy will solve a homeowner’s foreclosure issues.  Increasingly, bankruptcy is a tool that advertisers on television and radio tout as a method of saving one’s home. There are different factors that enable your attorney to determine whether or not bankruptcy is a viable option for you.  Some common pieces of information are:

  • Is this investment property?
  • Is the house worth less than the amount owed?
  • Is there more than one mortgage on the house?
  • Is this a multi-unit building?
  • Are there tenants living in the property?
  • Has this individual filed bankruptcy before?

These are just some of the many questions that need to be addressed when preparing to file a bankruptcy.  The main point here is that this process can be complicated and careful analysis should be taken before rushing into a transaction as significant as bankruptcy.

Do your research and take these decisions seriously.  A contractor friend of mine who specializes in wood working once told me:

“Measure twice, Cut once!”

It’s a simple statement but has a very strong lesson.  If you make the wrong cut, the time it takes to redo or undo a transaction can far outweigh careful planning.  When thinking about bankruptcy, plan carefully, don’t rush things and do your research.

Please email me @ jsr@qrlawfirm.com or call me direct at (619) 630 – 2688.

John S. Reynard III, Esq. LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.


Posted in Bankruptcy, Deficiencies, Foreclosure, Lenders, Short Sales, Tax | Tagged , , , , , | Leave a comment

Loan Modifications and Bank Stories

By John Reynard III, Esq., LL.M. | Published: November 28, 2010

Please share briefly your story or comment on an experience you had while attempting to get a loan modification. Some examples that I am curious about are:

  • Descriptions of customer service agents who gave you advice or information that ended up being harmful.
  • Lost files that had to be repeatedly resent or resubmitted.
  • Homes being sold in a foreclosure auction while you were under review for a modification.
  • Homes being sold in a foreclosure auction while under review or in escrow for a short sale.
  • Any stories that you would like to add to this topic.

It is almost a weekly occurrence that my office speaks to a potential client who has had a negative experience with a lender.  The stories vary greatly and it never ceases to amaze me that something as important and significant as home ownership is dealt with so poorly by many of our nations largest institutions.

Please feel free to email me directly if you would prefer as opposed to posting something to my blog.  I can be emailed at jsr@qsrlaw.com.

Thank you!

John S. Reynard III, Esq. LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Bankruptcy, Deficiencies, Foreclosure, Lenders, Loan Mods, Short Sales | Tagged , , , , , , | 1 Comment

New Law Signed Aimed to Protect Homeowners Involved in Short Sales

By John Reynard | Published: October 18, 2010

On September 30, 2010 Governor Schwarzenegger recently signed Senate Bill 931 into law which amends the Code of Civil Procedure to add a new section 580e.  One of the main motivations for the passing of this bill is to align the treatment of a lender who agrees to allow a short sale with that same lender pursuing a non-judicial foreclosure.

Some of the major points of this bill are:

  1. The bill becomes effective for short sales occurring after January 1, 2011
  2. There is a requirement for lien holders’ approval of the short sale
  3. The new law applies to first mortgage liens for deficiencies in certain circumstances, but there are exceptions (i.e., a borrower who has committed fraud against the property or waste against the property can lose the statutory protections.)
  4. There is no change in the law for junior liens, we will have to refer to existing law for a junior lien holders’ ability to seek a deficiency judgment. (For a brief description of deficiency judgments please email me at jsr@qrlawfirm.com and I will forward you a recent article that I wrote on this topic.)

One major impact that this law should have is to put a halt on lenders seeking deficiency judgments from sellers post short sale when the same lender would not be permitted to seek a deficiency judgment after foreclosing on the property.  Prior to this law, a lender in some cases could seek a deficiency judgment from a former home owner by having the home owner agree to it in a short sale approval letter.  A deficiency represents the unpaid loan balance that is not covered by the proceeds of the short sale.

This is a very complex area of law and requires careful analysis in order to determine a lender’s ability to collect on a loan.  Some of the code provisions that are used to make these determinations date as far back as 1933 (i.e., CCCP §580b).  Some of the policy reasons for these laws exist today but much has changed in the way that mortgages are issued, serviced, and satisfied.  A primary goal of these laws was to lessen the impact of foreclosures on both local and regional economies as a result of the large number of distressed properties that came on the market during the great depression.

It is important that home owners know their rights.  Although these laws can protect a borrower from deficiency judgments, they can occasionally be waived or modified through subsequent contracts.  Contracts should be reviewed by an attorney familiar with this area of law in order to determine what the long term effect of completing a transaction will be.

John S. Reynard III, Esq. LL.M.

Quintana | Reynard
A Professional Law Corporation
Main Line:  619.231.6655 x104
Direct Dial: 619.630.2688
Facsimile:  619.243.0080
e-mail: jsr@qrlawfirm.com

Downtown San Diego Office:
101 West Broadway
Suite 1050
San Diego, California 92101

Orange County Office:
34211 Pacific Coast Highway
Suite 101
Dana Point, California 92629

The foregoing information is presented by Quintana | Reynard, APC as a news reporting service to clients and friends of the firm and is distributed with the understanding that Quintana | Reynard, APC is not rendering legal advice and assumes no liability whatsoever in connection with its use. If you have questions about the subject matter presented or desire to obtain more information on legal issues related to your business, please contact us at (619) 231-6655 or email us at info@qrlawfirm.com.

Posted in Deficiencies, Foreclosure, Lenders, Short Sales, Tax | Tagged , , , | 1 Comment

QMS Law Works to Help Local Pastor Save Home

By John Reynard | Published: May 11, 2009

Tommy Cannatello is pastor of the Oasis of Life Fellowship, where parishioners arrived last Sunday 5/3 to find a notice of sale posted on the front door.

The Fellowship has been located at the Cannatellos’ home since 2006.  Previously it was located at a building the parish helped construct at 1059 Tierra Del Ray in Chula Vista, and then for a short period at the community center, 373 Park Way, Chula Vista.

Tommy’s health is seriously affected by stress.  Currently, lenders rely on the pressure that the foreclosure procedure permits to collect mortgage debts from desparate homeowners.  Delivering the NOD and NOS creates great stress for homeowners, and some people believe the lenders prefer to deliver the NOS on Sundays.  The Sunday delivery to the Cannatellos created special stress and difficulty for the Cannatellos because of Tommy’s health conditions and also the church services and the negative impact on the parish.

Posted in Lenders, Loan Mods, Pro Bono | Leave a comment