Berks County / Foreclosure / Homes for Sale In Berks County / Homes for Sale in Lebanon County / Homes for Sale in Montgomery County / Homes for Sale in Schuylkill County / Lebanon County / Montgomery County / Mortgage / Schuylkill County / Short Sale

Mortgage Debt Relief Law Extended for 2013

Another Year for Mortgage Debt Relief

Might have come down to the 11th hour for Lawmakers, but they did manage to extend the Mortgage Forgiveness Debt Relief Act for another year.

What does this mean for homeowners?  The extension gives homeowners another year where they will be excused from paying taxes on the amount that was forgiven by the lender.

This law was set in place in 2007 and was to expire at the end of 2012, however has been extended now until end of 2013.  A law that gives financially strained home sellers tax relief on forgiven mortgage debt has been extended.

The mortgage debt that has been forgiven by the lender’s, either from a short sale or loan modifications is normally taxable.  With that being said the struggling homeowner would be responsible for paying the taxes on the difference as if it were income to them.

The law’s expiration also could have slashed the county’s already lower-than-normal housing inventory. Without the tax benefit, fewer homeowners would have tried to do short sales, which would mean fewer homes entering an already slimmed-down market. If it was not extended, there would’ve been a number of people who also would have just let their homes go back to the lender,

Not all forgiven mortgage debt is taxable. To be sure, ask a tax professional about the tax consequences of completing a short sale or loan modification.

If you are facing trouble, now is the time to contact our team before the clock runs out again.  Find out if short sale or loan modification is for you.

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