The bleeding just does not stop.

FL REALTORS-

Like former lovers who send you friend requests on Facebook, old debts can come back to haunt you.

But while you can ignore old flames, you can’t dismiss past debts, even if your lender forgave them. Debts that were canceled or forgiven are considered taxable income – something many taxpayers don’t realize until they receive a 1099-C tax from their lenders.

During the Great Recession, lenders wrote off billions of dollars of credit card debts deemed uncollectible. Now, the tax bills on that debt are coming due. The IRS estimates that creditors will send taxpayers 6.4 million 1099-C tax forms this year, up from 3.9 million in 2010.

The appearance of an unexpected tax bill “creates a financial nightmare for people who have already been through financial hell,” says Gerri Detweiler, personal finance expert for Credit.com.

Fortunately, if unemployment or other financial calamities forced you to default on your debts, there’s a good chance you won’t have to pay the tax bill. You qualify for an exemption from taxes on forgiven debt if:

READ MORE [FLORIDA REALTORS]

NY TIMES – Gretchen Morgenson

AMID all the talk of debt and default in Washington last week, tiny Central Falls, R.I., went bankrupt.

Like many states and cities in these hard economic times, Central Falls — population: 19,000 — was caught short by hefty pension obligations and weak tax revenue. It may not be the last municipality to file for bankruptcy. Jefferson County, Ala., is now on the brink of it, thanks to a sewer bond issue gone wildly bad.

But while pensions and the economy are behind many of municipalities’ troubles, Wall Street has played a role, too. Hidden expenses associated with how local governments finance themselves are compounding financial problems down at city hall.

[NY TIMES]

Denver Post-

Nearly a dozen major banks and hedge funds, anticipating quick profits from homeowners who fall behind on property taxes, are quietly plowing hundreds of millions of dollars into businesses that collect the debts, tack on escalating fees and threaten to foreclose on the homes of those who fail to pay.

The investors, which include Bank of America and JPMorgan Chase, have purchased from local governments the right to collect delinquent taxes on several hundred thousand properties, many in distressed housing markets, the Huffington Post Investigative Fund has found.

In many cases, banks and hedge funds created new companies to do their bidding.

In exchange for paying overdue real-estate taxes, the investors gain legal powers to collect the debts and levy fees. At first, property owners may owe little more than a few hundred dollars, only to find their bills soaring into the thousands. Some jurisdictions tack on bills, such as for water, sewer and sidewalk repair.

We saw this coming for a bit now…

(Reuters) – The Internal Revenue Service has launched a review of the tax-exempt status of a widely-held form of mortgage-backed securities called REMICs.

The IRS confirmed to Reuters that the review comes in response to mounting evidence that banks violated tax requirements by mishandling the transfer of mortgages to REMICs, short for Real Estate Mortgage Conduits.

Via CNN MONEY

NEW YORK (CNNMoney) — Did you lose your house to foreclosure this year? Did your lender forgive some of your mortgage debt because the house sold for less than it the mortgage balance?

If so, you could be facing a big tax hit.

Dated: March 24. 2010
Lyons, New York

Mortgage Electronic Registration Systems (MERS) moves under Article 11 of the Real Property Tax Law (RPTL) and within the limitations period set forth in RPTL § 1137 for an order setting aside a deed issued pursuant to a tax foreclosure proceeding under Article 11. The operative facts are uncomplicated and undisputed.

The central question presented in the instant matter are the rights, if any, Wilmington Finance and/or MERS gained under RPTL §I 125(a) by virtue of these references in the Mortgage.

To accept MERS’ argument would require the County to read every mortgage from A to Z to make sure there are no “Nominees” of the Lender entitled to notice of tax foreclosure in lieu of or in addition to the Lender.

Second, the Mortgage from which MERS derives its claim of right to statutory notice under RPTL § 1125 is by no means crystal clear as to what MERS’ involvement as “Nominee” requires after the recording of the mortgage. Indeed, MERS does not explain what role the “Nominee” plays in the recording of a mortgage, or thereafter, except perhaps as something akin to a power-of-attorney or agent, albeit with independent standing. If the later is the case, it is incumbent upon the “Nominee” to state its status as one due notice in the separate declaration of interest form required under section RPTL §1126, which the County does have a categorical duty to read.

According, the application of MERS shall be, and the same hereby is, denied.

[ipaper docId=37751868 access_key=key-24fih6oxf1j7dp0inp5q height=600 width=600 /]

LMFAO!! Yet Another Bomb! Thank you for the rise in Real Estate sales…How do you say “bait and switch”! Were these disclosure properly made?

Can’t wait to see the outcome of these sub-prime mortgages when most of the 950K were counting on this!

Les Christie, staff writer, On Thursday September 9, 2010, 2:40 pm EDT

Nearly half of all Americans who claimed the first-time homebuyer tax credit on their 2009 tax returns will have to repay the government.

According to a report from the Inspector General for Tax Administration, released to the public Thursday, about 950,000 of the nearly 1.8 million Americans who claimed the tax credit on their 2009 tax returns will have to return the money.

The confusion comes because homebuyers were eligible for two different credits, depending on when their homes were purchased.

Those who bought properties during 2008 were to deduct, dollar for dollar, up to 10% of the home’s purchase price or $7,500, whichever was less. The catch: The money was a no-interest loan that had to be repaid within 15 years.

Had they waited to buy until 2009, they could have gotten a much sweeter deal. Congress extended the credit and made it a refund rather than a loan.

Continue Reading…YAHOO