QUESTION: I am an active duty member that was forced to change assignments and now have a VA loan that has the possibility to go to foreclosure. I am currently trying to get a short sale through. I need to know what kind of protection I have as far as the taxes after it forecloses and all the other sneaky things that the VA can protect me from.
ANSWER: You need to contact your loan service company. Try to work out payment arrangements or try to rent it out. If you have a buyer then definitely talk to them about a short sale. I have not heard of VA protecting the Veteran from owing taxes on the short fall but with all this bail out stuff who knows what will happen. Usually all bets are off once a house is foreclosed on.