The Mortgage Debt Forgiveness Relief Act is Extended for One Year
They finally did something. Congress passed and the President signed a bill that included a one year extension of the Mortgage Debt Forgiveness Relief Act. They also kept in place the Mortgage Insurance deduction.
This should come as a huge relief for many homeowners who are underwater in their mortgages and not quite sure what to do. If you are one of those people you should start working on your short sale immediately because one year comes very quickly when dealing with a short sale. Do not put it off anymore since there is a lot of doubt whether it will get extended again.
Also realize that if the bank forecloses you still are responsible for the tax bill and you are NOT in control of WHEN the bank decides to foreclose.
So consider this… you do nothing and then the bank decides to foreclose. The bank takes their time and doesn’t finalize the foreclosure until January 2014 and the law is not extended. You will be very sorry that you didn’t take control of your situation because you will now potentially owe a large tax bill to the IRS. There are other exclusions such as Bankruptcy and Insolvency but you really don’t want to use these options unless absolutely necessary.
The best advice I can give you is to take control by taking action in 2013. The sooner you deal with the situation the sooner you can get back on the right track.
If you have any questions or concerns about your own personal situation I would be happy to give you a FREE one on one legal consultation. You can call me at 916.442.6400 or send me an email at firstname.lastname@example.org or just visit my website www.upsidedownca.com.
California Attorney and
licensed Real Estate Broker