If not – be thankful. Smile. Relax.
But not everyone can do that.
I help a lot of Perrysburg homeowners who owe more to the bank than their home will sell/appraise for – that being the definition of “underwater” real estate.
And in an earlier blog post I mentioned that the short sale / loan modification freight train was going of the tracks on 1/1/2013 unless the US Congress did something.
They did something.
If you have been considering a short sale for your home, you’ll be excited to know that the Mortgage Forgiveness Debt Relief Act of 2007 was extended through the end of 2013.
As short sales have represented a large sector in the housing market of late, the extension is seen by many as key to a continued recovering housing market. According to the U.S. Foreclosure & Short Sales Report™ complied by RealtyTrac, the last quarter of 2012, showed short sales as representing 19 percent of residential home sales in the United States. See the full report by clicking here.
According to RealtyTrac Vice President Daren Blomquist, the increase in short sales and distressed properties showed that “both lenders and at-risk homeowners are realizing that short sales are often a better alternative than foreclosure.” Blomquist went on to explain that had the Mortgage Forgiveness Debt Relief Act expired, homeowners would have seen their income tax increase since the unpaid loan balance created by the short sale would have been considered taxable income for many home sellers.
With this recent extension, if you are a home owner interested in a short sale for your home, you now have until December 31, 2013 to benefit from the reduced taxes provided by Mortgage Forgiveness Debt Relief Act.
What happens then – no man knows.
But the tax forgiveness part of this process is vital.
And the new extension makes short selling and loan modifying viable for 43551 homeowners for 12 more months.
I have 2 Perrysburg short sales ready to close by the end of January – and I am very thankful that I don’t have to tell them to abandon the process – because not one underwater homeowner that I know in Perrysburg is going to pay a tax on the “gain” of short selling their home or modifying their loan.