Tax Info

STATEMENT TO ELIGIBLE BORROWERS

You received a check because you are eligible to receive a payment from the EB Expedited Payment Agreement Qualified Settlement Fund (“QSF”), established as a result of the Expedited Payment Agreement between EverBank and its federal banking regulator, the Office of the Comptroller of the Currency (“OCC”).

This Agreement concludes the Independent Foreclose Review (IFR) with respect to EverBank and provides payments to borrowers who had mortgages serviced by EverBank that were in any stage of the foreclosure process in 2009 or 2010 (“Eligible Borrowers”).

This Statement to Eligible Borrowers (“Statement”) provides information to help you determine the U.S. federal income tax consequences of the payment if you are a citizen or resident of the U.S. for U.S. federal income tax purposes.

ALL PAYMENTS IN CONNECTION WITH THIS AGREEMENT MAY BE SUBJECT TO TAXATION DEPENDING ON THE BORROWER’S INDVIDUAL CIRCUMSTANCES.

YOU SHOULD NOT RELY ON THIS STATEMENT AS TAX ADVICE. CONSULT YOUR TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES OF YOUR PAYMENT, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX RULES.

Damasco & Associates LLP, a certified public accounting firm, (“Damasco”) was retained as the Tax Advisor for the Qualified Settlement Fund. Damasco has participated in the preparation of this Statement, but is not providing tax services or tax advice to you regarding your payment.

$1,050 FLAT PAYMENT AMOUNT

As part of the Agreement, $1,050 is the “Flat Payment Amount” or minimum or payment per loan for all EverBank loans that were at any stage of the foreclosure process in 2009 or 2010. An initial check for $1,050 that does not include a Payment Breakdown section indicates either that your loan was not reviewed by the independent third party or the review did not identify errors with financial harm which have multiple tax reporting components.

If you received a check for $1,050 that does not include a Payment Breakdown, the $1,050 payment does not represent reimbursement of any particular amounts tied to actual injury and is intended to compensate you for potential financial harm that you may have sustained as a result of the deficiencies and unsafe or unsound banking practices. In this case, the entire $1,050 payment constitutes taxable income to you.

The QSF will issue a Form 1099-MISC to you reporting income of $1,050.

PAYMENT BREAKDOWN COMPONENTS

A Payment Breakdown is included on the letter attached to your check if the review of your loan identified errors with financial harm that have multiple tax reporting components. The total payment for your loan could be the minimum payment amount of $1,050 or for more than $1,050, depending on the errors with financial harm identified by the independent third party.

If the letter attached to your check includes a Payment Breakdown section, your payment includes the following components. Refer to the letter attached to your check to determine which components are included in your payment. Each of these components has different tax reporting obligations for the QSF and may have different tax consequences for you.

  • Return of fees you paid or were assessed

The return of fees you paid or were assessed may or may not constitute taxable income to you.

The QSF will not issue a Form 1099 to you for this component. Although the QSF does not have a Form 1099 reporting obligation with respect to the return of fees component, this does not determine the tax consequence of this component in your hands.

  • Interest on fees returned
    Interest on other payment components

The interest on fees returned and interest on other payment components constitutes taxable interest income to you.

The QSF will issue a Form 1099-INT to you reporting this interest only if it equals or exceeds $600. Although the QSF does not have a Form 1099-INT reporting obligation for amounts less than $600, this does not determine the tax consequence of this component in your hands. This component still constitutes income.

  • Flat payment for potential credit reporting errors

The flat payment for potential credit reporting errors is intended to compensate you for potential credit reporting errors made by EverBank. This component does not represent reimbursement of any particular amounts tied to actual injury and is intended to compensate you for potential financial harm that you may have sustained as a result of the deficiencies and unsafe or unsound banking practices.

The QSF will issue a Form 1099-MISC to you reporting this income only if the sum of all your 1099-MISC payment components equals or exceeds $600. Although the QSF does not have a Form 1099-MISC reporting obligation with respect to amounts less than $600, this does not determine the tax consequence of the flat payment for potential credit reporting errors in your hands.

  • Minimum payment adjustment

For most loans, the minimum payment adjustment component is an additional amount to bring the payment for your loan up to the $1,050 minimum payment required by the Agreement. For a small number of loans, the payment is comprised of a minimum payment adjustment as well as additional compensation under one or more of the other payment components described herein. The minimum payment adjustment component does not represent reimbursement of any particular amounts tied to actual injury and is intended to compensate you for potential financial harm that you may have sustained as a result of the deficiencies and unsafe or unsound banking practices.

The QSF will issue a Form 1099-MISC to you reporting this income only if the sum of all your 1099-MISC payment components equals or exceeds $600. Although the QSF does not have a Form 1099-MISC reporting obligation with respect to amounts less than $600, this does not determine the tax consequence of the minimum payment adjustment component in your hands.

  • Framework base payment

The Framework base payment component does not represent reimbursement of any particular amounts tied to actual injury and is intended to compensate you for potential financial harm that you may have sustained as a result of the deficiencies and unsafe or unsound banking practices. The Framework base payment component constitutes taxable income to you.

The QSF will issue a Form 1099-MISC to you reporting this income.

  • Return of a portion of monthly principal and interest payments

The return of a portion of monthly principal and interest payments constitutes a return of mortgage principal and interest you paid in a prior tax year. The portion that constitutes a return of principal is not income to you. The portion that constitutes a return of interest may be income to you, in whole or in part, if you deducted the interest on your personal income tax return in the tax year(s) in which you originally paid interest on the mortgage loan. If you did not itemize your income tax deductions in the year(s) in which you originally paid interest on the mortgage loan, then you did not receive a tax benefit related to the interest you paid and this component is not taxable income to you.

The QSF will not issue a Form 1098 or 1099 to you for this component. The QSF is not required to report the return of a portion of monthly principal and interest payments. Although the QSF does not have a Form 1098 or 1099 reporting obligation for this component, this does not determine the tax consequence of this component in your hands. You should consult with your tax advisor as to how to report any portion of this component that is taxable to you.

  • Return of equity

The return of equity component is intended to compensate you for harm to your real estate investment caused by EverBank’s conduct. The return of equity component is not income to you to the extent it does not exceed your basis in the real estate which secured your mortgage loan; however, you must adjust your basis downward by the amount you receive. Generally, your basis is the amount you paid for your real estate, plus other amounts for certain improvements to the property. If the amount of the returned equity component exceeds your tax basis in your real estate investment, then the excess is includable in your income as capital gain. Any such capital gain is long-term capital gain, unless you disposed of your real estate investment before holding it for longer than one year.

The QSF will not issue a Form 1099 to you for the return of equity component because the QSF is not required to report a return of equity. Although the QSF does not have a Form 1099 reporting obligation for this component, this does not determine the tax consequence of this component in your hands. You should consult with your tax advisor as to how to report any portion of the return of equity that is taxable to you.

Further information about your payment may be found at www.EverBankIndependentForeclosureReview.com. Further information about taxes related to your payment may be found at www.irs.gov.


Questions? You may contact EverBank directly at 1-800-669-7724.


Watch out for Scams
Beware of anyone who asks you to pay a fee for a foreclosure review service or to receive a payment related to the Independent Foreclosure Review.