Second Mortgage Charged Off By Chase
Chase did a charged off on my second Mortgage. What comes next? Mortgage Loan Modification Answer:by Loan Modification Expert - Dan NorthThe first question that comes to mind is did they charge off the entire 2nd mortgage or was this a principal reduction of the unpaid principal balance? Then depending on why they did the charge off would help to answer the question "What comes next?"The answer to that question depends on a few things. I assume that you asked Chase to reduce your unpaid principal as part of a loan modification on your 2nd mortgage and this was not a charge off in a bankruptcy proceeding. If both your 1st and 2nd mortgages are with Chase I would consider this a good indication that they are seriously trying to work out a mortgage loan modification on your 1st mortgage that will work for both you and Chase. While most of the principal reductions that Chase does are on 2nd mortgages they rarely do principal reductions or charge off entire mortgages even on second mortgages when modifying loans. If you are now waiting for your loan modification agreement from Chase on your 1st mortgage, give them any paperwork or documentation they ask for as quickly as you can. If Chase is not your lender on your 1st mortgage, it is possible your lender on your 1st is working out a deal with Chase which could be a HOPE For Homeowners (H4H) principal reduction through a Short Refinance deal. If this is the case definitely let me know about that. This would be the first H4H deal with Chase that I have heard of. Here Is What Comes Next From The IRSThe amount that Chase charged off is reported by Chase to the IRS on Form 1099‐C as debt forgiveness and is considered income by the IRS. The amount of debt forgiven must be reported on IRS Form 982 - Reduction of Tax Attributes Due to Discharge of Indebtedness - this form must be attached to your tax return. You have grounds to exclude this income from your taxable income since it is debt forgiveness on your principal residence (you should consult IRS Publication 4681 - Canceled Debts, Foreclosures, Repossessions and Abandonments.) Here is a short list of links for further information:
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