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Short Sale help for homeowners will be a little different after December 31, 2012, there is a deadline approaching that will effect all homeowners struggling to pay their house payment. The Federal Mortgage Debt Relief Act ends on Dec. 31, 2012.
I am a Certified Distressed Property Expert and have helped many sellers short sale their homes.
What does this mean to you and how and what is the Mortgage Debt Forgiveness Act?
This Act was a law voted on by Congress to protect homeowners who were struggling to pay their mortgages and instead of taxing the homeowner for the difference in what was owed the bank and what the house sold for, this law became effective in 2007 so that homeowners who received a 1099 for the difference did NOT have to pay taxes on that money. This law protected the homeowner up to $1mil for single family and $2mil for couples. But, as of Dec. 31, 2012 it will expire unless Congress decides to renew it.
So, if you are having difficulty paying your house payment, you might want to seriously consider a short sale, pronto since this law that protects you is about to sunset. Remember, it takes awhile to get a house sold and the short sale bank(s) to approve the short sale which means the looming date of 12-31-12 is not that far off. The window of opportunity is fading…unless Congress decides to extend the law.
My guess is that there will be sellers who wait till the last minute and this will boggle down the short sale process with the banks something fierce so if you have spoken to your CPA and find this could have a strong impact on your taxes, then give me a call and let’s get started with your short sale before the law that protects you, sunsets.
Short Sale for most people is a better alternative than foreclosure. It’s always wise to speak to your own personal CPA or tax attorney for advice to your particular circumstances. As a REALTOR®, I’m here to help you if you decide a short sale is your best option.
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First and foremost the forgiveness act is not so forgiving. 9 out of 10 times homeowners looking to modify loans are just wasting time. Better do a short sale and just move on. Banks are really moving along with short sales and getting them done with banks even doing a deficiency wafer which lets you walk away without paying back the difference of whats owed.
I agree, but the homeowner needs to know what all their options are and make their own choice.