The double billing bill
Oregon lawmakers seek to pass a bill that stops banks from claiming a loss on a short sale and still collecting the money later from the borrower.
Homeowners get the 1099 from the bank, pays taxes on the bank’s loss and is still collected on by the bank after the fact, typically through collection agencies or even lawsuits, thus they are being “double billed.”
Oregon State Representative Jason Conger told KBND talk radio that the House Bill makes the bank chose one option and not do both: “A bank still has the right under the contract unless they waive it to try to collect the residual debt from the borrower and this bill prevents the bank from reporting it as income to the borrower and trying to collect the debt.” Conger says to his knowledge this practice isn’t very widespread, but definitely needs to be dealt with.
The House Bill now moves to the Senate and is likely to pass. Is double billing legal in your state? Tell us in comments the state of affairs in your location.