GMAC Mortgage was helpful when I was trying to sell my home for the market value, which had dropped and was less than what I owed. They did so by a short sale, of which I have to pay them back since it was in 2006 before the cancellation of debt bill went into affect.
Two years later I receive a letter from the IRS stating that I owe them $4,000 in taxes from a "cancellation of debt" by GMAC. After many letters and documentation from the closing, I was able to prove that I was paying back the amount and it was NOT a cancellation of debt. The IRS letters were not very clear and I had to re-read the entire situation many times before understanding what they thought I owed money for. Most people have to hire a lawyer!
If I am just one person that GMAC mortgage wrote off as a cancellation of debt for $14,000, imagine 10,000 other people @ $14,000 for tax yr 06. That would equal 14,000, 000 they tried to save by reporting losses incorrectly!
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