The Senate Finance Committee approved the extension of the Mortgage Forgiveness Debt Relief Act of 2007! This is a good sign that the Mortgage Forgiveness Debt Relief Act will be extended. For those unfamiliar with the Mortgage Forgiveness Debt Relief Act of 2007 :
During the housing crisis, many homeowners facing foreclosure have been able to modify their mortgages or complete a short sale of their home. And sometimes a lender will forgive a portion of the principle. The amount forgiven would normally be considered income, and would be taxed. That would be hard on people that are already struggling, and would potentially defeat the purpose of the modification. Congress saw that this was a problem, and, in 2007, enacted a law exempting the amounts forgiven by mortgage companies from income tax. This law is set to expire on December 31, but the Senate Finance Committee recently voted to extend it. This is good news for homeowners facing foreclosure, but not great news. More still needs to be done!
If you have questions about this blog post, short sales, or real estate in general (non-legal only), call Bayview Estates Realty at (516) 777-0146 to speak with a knowledgeable real estate agent.