Last year I was hounded by my mortgage company to refinance my home. I had not been late on any payments. I was OK with my payments, not in any type of financial bind etc. I finally relented and listened. They offered to reduce my interest, but the rate wasn’t worth the charges. They came back and offered to cover the appraisal costs, closing costs and reduce the total amount owed as part of a new FHA program. Future discussion on the phone with their rep revealed they wanted my loan which was in good standing to bundle with other loans to sell it, all apart of the “new housing program”. Thought it was a great deal since it lowered my house note about $400.00 per month. In less than a month after signing, they sold my loan to one of the majors that was in the news (TARP Money) going under etc. Started making timely payments to the mortage comapny, no problems etc. I just received a 1099C, which shows the amount of debt cancelled. The house appraised for $209K and they show fair market at $233K during the middle of the housing melt down. All these conversations took place on their phones and each time we spoke I was notified that we were being recorded.
Am I liable for the amount or the taxes on the amount listed as cancelled, when it was an offer by the mortgage company, to entice me to refinance, so they could sell the loan?
If you have a credit or debt question you’d like to ask just use the online form. I’m happy to help you totally for free.Mortgage Company Sent Me a 1099-C. Do I Owe Tax On This? - Derek by Steve Rhode