Do you support renewing the Mortgage Forgiveness Debt Relief Act?
Yes (80%, 207 Votes)
No (20%, 52 Votes)
Total Voters: 259
Is the end nigh for shortsales?
In response to the housing crisis, the federal Mortgage Forgiveness Debt Relief Act (the Act) expanded tax relief for lender discounts on shortsales to cover both recourseA lender may pursue a homeowner for a loss due to a deficiency in the value of the secured property if the lender forecloses judicially or is a wipe out recourse second trust deed.and nonrecourseA lender may not purse a homeowner to collect a nonrecourse debt for a loss due to a deficiency in the value of the secured property in the event of foreclosure.mortgages. If the Act is allowed to expire at the end of 2012, many California homeowners with underwater homes will lose their ability to avoid income taxes on the resulting discharge-of-indebtedness income.
In the fourth quarter of 2011 there were over two million mortgages with negative equityThe condition of a property owner owing more on a mortgage than the current fair market value of the encumbered property. in California. Thus, about a third of all California homeowners were encumbered by a mortgage amount exceeding the value of their home, according to Corelogic. With shortsale negotiations still taking in excess of five months, homeowners looking to escape from their underwater prisons had better get a move on or find out whether they are covered by some other regulation before the Act expires.
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