Hello Marten, Whether or not your line of credit is tax deductible will depend on the purpose for which you have borrowed the funds. The interest may be tax deductible as long as the funds were borrowed and invested into a CRA qualifying investment (i.e. the investment must have the capability to generate an income). If funds were borrowed for personal use (e.g. to purchase your primary residence) you may not be eligible to deduct the interest. If you are interested in learning more about making your mortgage tax deductible we have some great video tutorials that you can watch for free at www.mortgagepal.ca Good luck! Jason Henneberry Founder, MortgagePal.ca 604-908-2187

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I have a first and second mortgage (to avoid pmi) and i am wondering if, after foreclosure, if we are going to be liable finacially for the banks loss, or the difference between our loan balance and what they get in the foreclosure sale? i know that our credit score will be affected, but i am wondering if that is the only repercussion? i also know the laws are different in states i am in nevada anyone that knows the nevada foreclosure law specifically would be great. i am also wondering once we move out, assuming we do so before notice to evict what role will we, as the homeowners, need to play in the foreclosure process? i have heard that you must fill out a 1099 form for taxes? saying the difference between the amount owed and what the bank gets is roughly 30,000 what would that mean we pay at tax time?

Yes, the mortgage company can go after you for difference between the amount of sale at foreclosure and the amount you owe them. This is called a Deficiency Judgment and Nevada does allow for these judgments. Some banks will do this, some won't. It's totally up to them. The tax implications come from another process that the bank could choose to do. They can choose to forgive the debt you owe to them. When they do this there is no Deficiency Judgment against you. The bank will issue a 1099 form to you and the IRS. This form basically states that you received X number of dollars as income from the bank. This "income" is the amount of money you owed them but they never chose to collect. The IRS treats this as income because the bank, in effect, gave you the money by forgiving your loan. You will then owe taxes on this income. Depending on your tax bracket you could owe anywhere from $6600 to $10,500 to the IRS for a $30,000 forgiveness. Just as a note, it's best to try and work with the bank before they file a foreclosure with the courts. You will save them a lot of hassle if you choose to do a deed in lieu or a short sale. Once it goes into foreclosure court then you are getting yourself in a really bad place. This site has the basic information on foreclosure laws for Nevada - http://stopforeclosure.com/Nevada_Foreclosure_Law.htm Good Luck!

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I had a loan through ameriquest years ago (loan shark company who went out of business in the financial crisis). then they sold my note to citibank, who then sold it to a third-party investor. they in turn hired a two-bit mortgage servicing company called ahmsi, who i've notice has a really bad reputation for foreclosing on peoples' homes without merit. they said i didn't have insurance when the whole time i did. they then purchased their own policy for $500 over my policy and added it onto my mortgage note as an escrow thereby increasing the monthly note by $300 per month. now that i've got that straightened out, one year later i'm nowhere near getting this straight. they have damaged my credit score and are trying to say that i owe them enormous amounts of money, when all the while i paid extra. the only thing i owe them is $870 because they stupidly paid out my homeowner's insurance (which they claimed i didn't have). i've ben fighting this for over a year and a half. i need help. please point me in the right direction of the state or federal agencies who watch these predatory companies.

call the deparment of justice.

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I bought my property on the peak of real estate. i put 30% down and now my house is appraised below what i originally paid. banks and lenders said i can't refinance because i owe more. lots of loan modication shark companies are telling me to beat the system by having a short sale or loan restructure. i am confuse. i am a hardworking american and with stellar credit and i don't have any other bills except my mortgage. does obama have any help for a homeowner like me that is stuck in the middle of this bad economy. all i know is the mortgage stimulus package is geared only for struggling families that cannot make their payment. i am playing the sit and wait game because all i want is to refinance with a better rate. republicans are pushing a bill to have a 4% fixed apr on a 30 year loan. i want that rate but like i said earlier lenders said no. that is so unfair. i guess the mortgage stimulus package helps the poor and benefits the rich but the big majority of americans (middle working law abiding citizens) are getting screwed.

I understand your anger, but you must understand, too, if you are in your home and paying your mortage, you are doing a lot better than most. The bill provides for new loans (to help with the housing market) and for people in foreclosure. Eventually, this will help improve your property values. The banks are not lending money and there lies a problem. Give it time, it will work out.

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I own a home that was refinanced a few years ago. i also have a second mortgage. both are 30 year fixed mortgages. the second was taken out to buy out my ex as part of a divorce settlement. my company just layed off several people. i make a very good living, but i am very concerned that another round of layoffs is coming, and that i might be a casualty. in fact, my industry in general is hurting right now, and getting a job with similar compensation would be difficult. as for the note on the property, i owe $530k (includes a second mortgage of $135k), on a house that is probably worth $425k (at best) right now. if i do lose my job and can't get another, (which pays enough to allow me to afford the mortgages), in a reasonable period of time, does it make sense to drain my savings for a house that is losing value? then what? i will be broke and jobless (or under-employed). it seems that i would lose the house anyway...but walk away with nothing in the bank if i try to hold on to the bitter end. i don't have the same issues as sub-prime borrowers, but i am being impacted by the bad economy and all the foreclosures driving home values into the toilet. do i want to invest $48k per year (one year's worth of payments) for a house that is losing value? if it took 5 years for housing to recover, that's nearly a quarter of a million dollars spent...for what? to just "break even"? is that a smart plan? tax advantages will be moot if i am not working. is it worse to dump every last penny into a house that is depreciating? is that smarter (and more economical) than getting killed on my credit? in summary, if i do lose my job, my thought is to immediately bail out of the house (unless my creditors are willing to go the extra mile to help me). i see no value in taking the moral ‘high road’ as i lose everything. i do believe in living up to my obligations. but i also believe that common sense has its place too. i would love some advice. this scenario only applies if i lose my job. hey 'vb', you missed my point completely...but thanks anyway.

If you lose your job, this counts as a hardship for a short sale, which may be an attractive option for you. A short sale is where you come to an agreement with the bank for them to take whatever you can get for the house to pay off the debts. This is a better option than a foreclosure for a couple of reasons: First, it's less of a negative hit on your credit report. It shows that you took some responsibility to work out a solution rather than just walking away (foreclosure). Second, a bank can go after other assets with a foreclosure to get their money back. This may include hiring a collections agency, who will hound and pester you forever. With a short sale, the debt is just forgiven. One requirement for a short sale is to submit a hardship package to the bank (the loss of a job is one such hardship - and "I owe more on the house than it's worth" is not a hardship). The bank then instructs you to sell the house for whatever you can get for it. The listing will include a disclaimer saying something like "Offers accepted pending lender approval." When an offer comes in, the bank will then negotiate with all other lienholders (other mortgage holders on the property) to deetermine who gets how much if the property sells for that offered price. If all lienholders can come to agreement, the bank instructs you to accept the offer. The transaction then proceeds like any other real estate sale. The only difference is that the bank may instruct you to pay all of your closing costs (like property taxes owed, real estate commissions, etc.). If the lienholders can't come to an agreement, then the bank will instruct you to reject the offer and list the property for a higher price. Some banks require you to go into default before agreeing to a short sale. In this case, you stop making payments and they issue a notice of default that stipulates that the property will go up for foreclosure auction about 3-1/2 months after the notice of default is issued. This basically forces you to go through with the short sale in an expeditious manner, with the threat of foreclosure looming over your head. And, I read in the paper this weekend that only 20% of short sales go through. The rest become foreclosures.