On January 1, 2013 Congress passed an extension of the Mortgage
Forgiveness Debt Relief Act, which was set to expire December 31, 2012.
The extension of this act, which has saved homeowners more than $1
billion dollars in taxes so far, is great news for struggling homeowners
nationwide!
The Mortgage Debt Relief Act was originally passed in 2007 to aid the millions of homeowners who suddenly found themselves in danger of losing their homes to foreclosure following the housing market crash.
Under the Mortgage Forgiveness Debt Relief Act, debt forgiven in a short sale, foreclosure, or loan modification, is exempt from federal taxes on primary residences. For homeowners facing foreclosure, this exemption saves them from paying thousands, or even tens of thousands, in taxes on top of losing their homes.
Now for another year, homeowners can take advantage of this exemption and avoid foreclosure without the fear of an impossible tax liability.
With the extension comes an increase in short sales, which means customers will be able to walk away from a home they no longer can afford in order to make a fresh start!!
And with banks recognizing the significance of short sales as an effective loss mitigation tool, they’re ramping up for business. Short sales will be the key loss mitigation tool used by mortgage servicers in 2013.
The Mortgage Debt Relief Act was originally passed in 2007 to aid the millions of homeowners who suddenly found themselves in danger of losing their homes to foreclosure following the housing market crash.
Under the Mortgage Forgiveness Debt Relief Act, debt forgiven in a short sale, foreclosure, or loan modification, is exempt from federal taxes on primary residences. For homeowners facing foreclosure, this exemption saves them from paying thousands, or even tens of thousands, in taxes on top of losing their homes.
Now for another year, homeowners can take advantage of this exemption and avoid foreclosure without the fear of an impossible tax liability.
With the extension comes an increase in short sales, which means customers will be able to walk away from a home they no longer can afford in order to make a fresh start!!
And with banks recognizing the significance of short sales as an effective loss mitigation tool, they’re ramping up for business. Short sales will be the key loss mitigation tool used by mortgage servicers in 2013.
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