Can someone please answer my question; will I owe taxes on that $118, 300?

Yes that could very well happen.
Use the search box at the www.irs.gov website for The Mortgage Forgiveness Debt Relief Act and Debt Cancellation
If you owe a debt to someone else and they cancel or forgive that debt, the canceled amount may be taxable.
The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief.
This provision applies to debt forgiven in calendar years 2007 through 2012. Up to $2 million of forgiven debt is eligible for this exclusion ($1 million if married filing separately). The exclusion does not apply if the discharge is due to services performed for the lender or any other reason not directly related to a decline in the home’s value or the taxpayer’s financial condition.
More information, including detailed examples can be found in Publication 4681, Canceled Debts, Foreclosures, Repossessions, and Abandonments. Also see IRS news release IR-2008-17.
The following are the most commonly asked questions and answers about The Mortgage Forgiveness Debt Relief Act and debt cancellation:

What is Cancellation of Debt?

Use the below enclosed website addresss for more detailed information and some question and answers
Hope that you find the above enclosed information useful good luck.

You might consider a FHA mortgage loan as the requirements are not as stringent as those of a conventional mortgage loan. There are some FHA mortgage loans that require as little as 3.5% down payment.

You might want to verify this property that is being sold for $20,000, the ad might say as low as $20,000 and then of course there is the neighborhood where this type property might be located. Also this $20,000 property could be a condo or perhaps a townhouse.

I hope this has been of some benefit to you, good luck.

"FIGHT ON"

The housing crisis was caused by the massive de-regulation of the mortgage industry. Just go to Las Vegas and see the blocks of foreclosed homes that were bought for a half million dollars by people who could only afford a two hundred thousand dollar house. These homes were bought at inflated prices through ARM loans, and interest only loans. They were told the home would go up in value to the point where at the end of three to five years they could either sell the home for a large profit, or else refinance. These were the six figure yuppie types that bought these places, not lower income people.

The government did not "force" banks to loan money to anyone. This is a Limbaughesque lie.

As for Bush seeing the crisis coming and trying to stop it is laughable. I saw a speech on You Tube where Bush is speaking before a group of Realtors in 2002. He says and I quote, "Just because people have lousy credit does not mean they have to live in a lousy home." He encouraged people with "poor credit to work with Fannie and Freddie."

Yes, after the roof started caving in the Bush Administration told Congress to do something. If Bush was as on top of this as right wingers claim, why did he never mention it in any of his state of the union speeches?

Mortgage companies are who we ought to blame. They were lending money to people with NO CREDIT checks, and lying about people’s incomes to get them into expensive homes.

The Republican National organization of Realtors were cheering as well.
Lower income people did not get ARM loans and interest only loans, the got standard FHA loans.

When Bush ran for re-election in 2004 he boasted at every campaign stop about all the new and "minority" home ownership.
The Real,
Even Alan Greenspan said that blaming the "Community Reinvestment Act" is nonsense.

low income people did NOT buy homes on anything but standard FHA loans.
White Power,

Bush did not warn anyone until the ship had sailed. Bush ran for re-election in 2004 boasting of all the new home owners. Low income people DID not get loans with balloon payments. Six figure types did.

Turn Rush,and Hannity, off and get real facts.

Why did Bush not ONE TIME mention this impending crisis in any of his State of the Union Speeches?
Warren,

The banks were NOT forced to loan money. They loved the government backed loans because they could make money with little risk.

Bush bragged in 2004 about all the new "minority home owners." It was part of his "ownership society."

It was actually the Bush administration who encouraged the onslaught of subprime loans. A couple of things happened. There were house flippers who thought the prices of homes were going to continue to rise (right before the so-called bubble pop). Also, a lot of high risk (or low income) people obtained loans they never should had. All this piled up. Then, companies like AIG sold credit protection on these loans. And when the housing market topped out and declined and the unemployment rate went up, many loans couldn’t be paid off.

The whole plan of blind consumer confidence was a fail. Money circulation in itself isn’t enough for a good economy.

I never owned a home or anything, I only had one auto loan and I paid it off. I have / had credit cards too (no late payments at all etc). No collections or nothing negative at all, credit history for 6 years.

It is difficult, but if you find a private seller, who will do AN AGREEMENT OF SALE", then you will have a chance. Possibly someone in financial difficulty or some one with several homes to unload.