Some important questions implicating Good Faith and Fair Dealing by Banks as Mortgagees are asked by Gretchen Morgenson, "Fair Game / How to Erase a Debt That Isn't There" p. 1, col. 2 (New York Times Nat'l ed., "SundayBusiness" Section, Sunday September 30, 2012).
It is reported that Mortgagee-Banks including Bank of America and JP Morgan Chase have sent letters to Homeowners forgiving Mortgages that were discharged in Bankruptcy years ago.
The letters also reportedly advise the Homeowners that the Banks' forgiveness of these debts which do not exist, will be reported to the IRS. Id.
Some questions arise, the answers to which do not appear to be entirely clear. See id. Will the Mortgagees-Banks claim that they are entitled to a credit for forgiving debts that do not exist, against their $25 Billion worth of obligations which include forgiveness of Mortgage debts? They voluntarily assumed those obligations earlier this year when they agreed to their Mortgage Fraud Settlement with some States and the Federal Government. See, for example, the post and links in it here on July 26, 2012, "BAD FAITH SETTLEMENT AGREEMENT: MORTGAGE SERVICERS, ATTORNEYS GENERAL, AND OBAMA ADMINISTRATION."
If the Banks report their forgiveness of debts to the Internal Revenue Service, the burden will shift to the Homeowners to explain to the IRS why the Banks made a mistake in reporting this forgiveness of nonexistent debts. Will the Banks seriously report forgiveness of these debts which do not exist, to the IRS?
Readers of this blog are invited to EMail and write these questions to the Mortgagees-Banks. Please take a moment to look up their addresses online and send them these simple questions. They should have the answers.
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