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The answers to some of these questions is what you paid the attorney that handled your bankruptcy to answer. You should ask them about the consequences of reconfirming the debt to Bank of America. This is too important to rely on answers received from the internet for your specific situation…even if Mortgage News Daily is a great place for information on mortgages.
With that said you should also check with Bank of America. As part of a 2012 settlement with state attorneys general and the Federal government, Bank of America is forgiving 150,000 second liens. Here is the press release: Bank of America 2nd lien extinguish program. If you have been selected for this program you will have received notification by Federal Express or certified mail.
Here is a link to the IRS website where you will find information on mortgage debt forgiveness: IRS publication 4681. As you can see this is a complicated subject. For example, to qualify for the current exclusion from tax on forgiven mortgage debt on a principal residence under the current provisions set to expire at the end of 2012 the debt must have been used to “buy, build, or substantially improve your main home.” So if the second lien doesn’t meet those provisions you may not be able to exclude the debt forgiveness even before the end of 2012. This is why it is important to contact a CPA or tax attorney to get an answer to your specific situation.
Same story, Filed personal BK Chapter 7 in AZ, has been discharged. We received a letter from B of A that our Home equity loan of $!90K is being forgiven. Both 1st & 2nd are serviced by B of A but owned by Nank of New York. We would like to modify & have tried but were told at the time Bank of New York was not budging on any mod’s. We included our home in the BK. My question, if we modify, do we have to Re-confirm our debt with them and if we do Re-confirm, Will we be responsible for the TAX liability owed if this does not go through or by 2012 when the Tax forgivness expires? Also how do we know for sure that they cannot come back on us for the second? Do they give you anything in writing from Bank of NY or just this generic lettter from B of A?
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