Several years ago, we were talked into getting what I believe was a predatory loan – a negatively amortizing mortgage for 100 percent of the purchase price of our home. The loan broker assured us we could refinance the following year to a more traditional mortgage.
We paid the minimum monthly payment required, which didn’t cover all the interest owed, so that amount was added to our mortgage balance. Like others, we have experienced the nightmare of the current housing market, and with the negative amortization adding on even more debt, we are severely underwater.
We’ve worked with two companies trying to get a workable loan modification but to no avail. The bank is not cooperating at all.
via Law exempts forgiven foreclosure debt from income on tax return.