marspiter
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I would suspect that since so many people are in this exact situation with their homes that there would be no deficiency judgement and any debt forgiveness would be a non taxable event. JMHO based on what is going on out there.
I know many people that are using this as an exit strategy and just cannot keep up nor do they want to.
In FL do they accept a deed in lieu?
Here's part of the CNN: Money article on deficiency judgments earlier this month:
http://money.cnn.com/2010/02/03/real_estate/foreclosure_deficiency_judgement/
"What can be scary is that the judgments don't have to be obtained immediately. Lenders or collection agencies may wait until debtors have recovered financially before they swoop in. In Florida, the bank can wait up to five years to file. Once the court grants a judgment, the lender has 20 years there to collect, with interest."
Which to me says that unless you have it specifically in your renegotiation's with the bank they are doing it and from this article it's far more prevalent now than it was in the past. So basically if in the next 5 years the A's make some cash off this case the bank could walk in and ask for their share.