How can I sell a home with a modified loan?

[favre_2_free]

Long story short, in order to save my Grandma from an ARM 5 years ago, I cosigned a mortgage through CITI with her.  About a year ago, we ended up getting the Mortgage modfied.  CITI reduced the debt by around $50,000, although on our credit reports, it shows up as the full balance, our monthly statement reflects the lower balance.  At this point, selling still isn't an option because the home isn't even worth the reduced amount, but at the point where that happens, how would I go about selling the home with a modified mortgage?  Would I only owe a payoff on the lowered amount?

[pizzadude]

----->  our monthly statement reflects the lower balance. ...

I am not a mortgage professional but I believe that your statement balance and payment are what you should go with, so assuming that you did find a buyer sometime in the future, you would be required to payoff the modified balance.

In terms of what tax consequences you might face, I would recommend doing some searching to see if Citi would be reporting the 50K to the IRS, you don't want to be suprised with a large tax bill. 

[boomhower]

Your going to need to pull out your paperwork and read the loan agreement.   I would also consult with a CPA for the tax implications.