Completion of W-9 for lender (bank)

Started by KevinK14 • 2 replies • 600 views

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KevinK14 (Florida)
Posts: 2

Posted:

We've just been recently handed everything from a 3rd party management company and the elected officers are still new and learning everything very quickly. We've been contacted by a lender (bank) regarding a foreclosure on a property. The homeowner is delinquent on HOA dues and late fees. We've been asked by the lender to complete a W-9 for 2017. However, we're not sure if we check a C or S Corp or "other". We currently file an 1120-H for tax purposes. I believe it should be a "C"...but, we want to make sure. Any insight would be appreciated. Thanks!

SheliaH (Indiana)
Posts: 6,964

Posted:

You might want to run this by your association accountant or whoever does your taxes and see what he/she says.
I would definitely talk to the association attorney as well, because I think filing a W-9 means a creditor will no longer pursue collection of a debt. The amount would then be counted as income and the delinquent homeowner would have to pay taxes on it.

If this lender wants a W-9 to get out of not paying the delinquent amount, I might say "umm, no" unless someone coughed up some money to pay down the delinquency. I've see too many instances where the bank sells the foreclosed home for whatever they can get and since it's usually not enough to pay the mortgage and any unpaid HOA fees, the HOA is left holding the bag. You need some guidance to ensure the association's interests are protected somewhere (it's not like the bank can go after you if you refuse to provide it...)

If it is not right do not do it; if it is not true do not say it. Marcus Aurelius

CjC
Posts: 210

Posted:

Quote:

Posted By SheliaH on 06/07/2018 12:18 PM
You might want to run this by your association accountant or whoever does your taxes and see what he/she says.
I would definitely talk to the association attorney as well, because I think filing a W-9 means a creditor will no longer pursue collection of a debt. The amount would then be counted as income and the delinquent homeowner would have to pay taxes on it.

If this lender wants a W-9 to get out of not paying the delinquent amount, I might say "umm, no" unless someone coughed up some money to pay down the delinquency. I've see too many instances where the bank sells the foreclosed home for whatever they can get and since it's usually not enough to pay the mortgage and any unpaid HOA fees, the HOA is left holding the bag. You need some guidance to ensure the association's interests are protected somewhere (it's not like the bank can go after you if you refuse to provide it...)

A W9 only certifies a tax payer identification number. Either a social or EIN. The HOA could look online to see how their HOA is registered with the state to see what type of Corporation it is.

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