Congress Considering Extension of Mortgage-Debt-Relief Until 2014 :: Real Estate for Santa Clarita VIDEO Update
Back in 2007 when the wave of short sales and foreclosure had first struck, congress passed the Mortgage-Debt-Relief Act of 2007. Prior to this act if you sold your home for $100,000 less than you owed, the government saw that loss as income to you the homeowner…and you had to pay taxes against that $100,000. Since the law was passed that debt is forgiven by the feds and you don’t owe if you do a short sale. The law ends Dec 31st 2012.
Congress has begun talking about extending it to 2014.
For anyone hoping that a fractious, election-bound Congress can manage to extend a law that is crucial to the housing recovery — the Mortgage Forgiveness Debt Relief Act — here’s a little good news: Before heading home for the Easter holiday recess, key members of the House and Senate tax-writing committees introduced bills that would keep the law alive through 2014.
Without action by Congress, the law — which allows homeowners whose mortgage debts have been written off by lenders in short sales, foreclosures, principal reductions and deeds-in-lieu of foreclosure to escape heavy federal taxation on the amounts forgiven — would expire Dec. 31, 2012.
From Inman News
If you or someone you know is considering a short sale on their home, there are many factors to be aware of including the expiration of the Mortgage-Debt-Relief Act.The laws are constantly changing and being aware of the rules and guidelines is a must not only for real estate agents, but for homeowners.