Do you still owe on your mortgage after a short sale?

We are currently doing a short sale on our home, me and my husband cannot afford it anymore. I'm clueless on the details about how this works though. Thanks.Do you still owe on your mortgage after a short sale?
No, you wouldn't owe anything after the short sale. If your lender is doing the short sale, they're forgiving the difference in the debt that is owed vs. what you will get for your house. Keeping in mind that even though you will no longer owe this money to the lender; the lender will report this to the IRS. The IRS views this as taxable income; so you will receive a 1099 for this. Depending on the amount of the short sale, this can be a very big number.





The government is currently working on some bills that would eliminate this as taxable income and just forgive the debt; but knowing how slowly the government works I wouldn't expect anything on this until next year. I don't see how they would make this retroactive so you might just miss the cutoff and have to these taxes.





I know its not an easy decision; but I am sure its a wise decision. A short sale is a much better option then foreclosure; its won't hit your credit as hard. Best of luck to you and your husband.Do you still owe on your mortgage after a short sale?
currently they say that the amount difference between the sale price and the loan amount is considered income and is taxable as such for your yearly earnings. The irs is being lobbied to change this but as far as I am aware, the difference is still considered income. Remember, even if this is the case, you can contact the irs and get a payment plan and avoid garnishment etc.