San Diego short sale

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Sunday, December 2, 2007

Cancellation of debt income - non recourse loan

Should a California homeowner with purchase money loans - agree to do a short sale?
One of the major issues is whether the short sale will create tax liability for loan forgiveness.

As I review some of the case law on this issue - my first question would be whether the loan is a non recourse loan on its own. (non necessarily as a result of California anti deficiency statutes). A careful and detailed review of the situation should be conducted by an attorney before an owner consents to a short sale.