Selling the house?

[fly]

The thing I would be worried about is that Florida is a deficiency judgments state. Which means the lender can sue you for the amount the lost on the sale of the property. I know for a fact in Lee county they are processing alot of these suits. I had to do some work at the county office and they have been running their court system 24/7 since December processing these suits to complete them all prior to the EOY. I was upgrading the system at 3am and they had the court full on.

Well, if its a short sale, that isn't a problem - as it gets written into the contract that the bank can't go after the money. But then the problem is that difference is classified as income, unless I'm declared insolvent (which from what I've read, in my case, shouldn't be hard to do).

However, it IS possible on a foreclosure, but from what I've read is extremely rare. The reason being is that it isn't generally worth it for the banks to spend the legal fees to attempt to collect money from someone who obviously has none. That said, the lawyer I spoke with said that he hadn't seen one in years and years, but you're right - it is possible. Good luck getting the money from me though.

 

[fly]

Well I stumbled across more research today and found that the IRS can't go after me for the difference on the short sale or the entire load (if its foreclosed on). Mortgage Forgiveness Act of 2007 prevents them from doing that until 2012. Knocks down another barrier.