Mortgage Forgiveness Debt Relief Act Has Been Extended!!
By · January 2, 2013
Just received this news from the California Association of Realtors.
"Late last night, Congress reached a settlement in the “fiscal cliff” negotiations. As a result, the Mortgage Forgiveness Debt Relief Act has been extended for another year. The measure will continue to exempt from taxation mortgage debt that is forgiven when homeowners and their mortgage lenders negotiate a short sale, loan modification (including any principal reduction) or foreclosure." REALTORS® should tell their clients to keep their short sales on the market and encourage them to consult with their own tax advisers about their tax situation."
It was through the help of over 26,000 California REALTORS ® who sent messages to Congress plus over 1,800 calls to make this happen.
This will help the many short sale sellers who purchased when prices were over inflated and interest rates were higher. Or homeowners who refinanced and now owe more than their property is worth.
So if you have a home that is "upside down" and owe more than it is worth, now just might be a great time to sell it before our members of Congress change their minds next year. And, if you think you want to wait, just know that it can take months to get an offer approved by the seller's lender. The way it works now, the sale must close before the end of this year. Sometimes buyers back out and you have to start all over again. So if you are considering selling your property that will be a short sale, I wouldn't wait, especially while interest rates are down and many buyers are out there.
However, be sure to always check with your tax adviser as to how this could affect you. In fact, anytime you buy or sell real estate, it is always wise to check with your tax adviser to be sure this is the financially correct thing to do
A question many people have - Why should these homeowners receive relief while there are others who are still struggling to make those higher payments on a home that is upside down because they can afford it? What do you think?