Mortgage Debt Tax Relief Ends December 31 2012 - Temecula Short Sales

By
Real Estate Agent with West Coast Realty Division BRE #01824145

Temecula Valley California homeowners will be faced with another obstacle to short sale starting January 1, 2013. The mortgage debt tax relief is scheduled to end December 31, 2012.

What this means is forgiven mortgage debt will now be taxable if, and if is the big word, the mortgage debt tax relief act is not extended, or some version thereof, put in to law. Given the general election this November, the mortgage debt tax relief act is not a number one priority for Congress.

Although the National Association of Realtors® is calling for the mortgage debt relief to be extended, at this point, it is an uncertainty.

Given the complexity of short sales and the financial impact they can have on the future to Temecula Valley California homeowners, it has always been broker recommended a homeowner considering a short sale consult with a licensed tax professional, CPA or attorney. 

Short sales are especially complex when there has been a refinance, or there is a second mortgage. Bankruptcy can also impact the success of a short sale. Although the good word may be short sales are easier, in reality this is not the case. Banks have share holders they are responsible to, and are not so quick to approve short sales. The process can drag on for months, keeping both sellers and buyers on edge "waiting for an answer," and then the answer may not be what both were expecting.

If a Temecula Valley California homeowner is underwater in their mortgage, it may be best to explore other options before jumping to a short sale. Loan modification, bankruptcy, or renting the property may help to alleviate the problem. Each homeowner's situation is different and a short sale may not be for every homeowner who is underwater in their mortgage. 

Most experts agree, that the mortgage debt tax relief, if not extended, will impact short sale sellers in the coming year.

Posted by

Pamela Seley

REALTOR®

Direct 951.491.4063

CA BRE License # 01824145

West Coast Realty Division

41185 Golden Gate Cir, #106

Murrieta, CA 92562 

pamelaseley@gmail.com 

Website: Temecula Valley California Homes

 

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Rainmaker
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Joan Cox
Metro Brokers - House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Pamela, those homeowners facing foreclosure or need to short sale may think about doing so quickly in light of this information. 

Nov 05, 2012 02:18 PM #1
Rainmaker
753,568
Pamela Seley, REALTOR®
West Coast Realty Division - Temecula, CA
CA BRE #01824145 Real Estate - Call 951.491.4063

Joan, it may be too late in the game now to do a short sale and make the December 31 deadline, unless it were one loan, and lender has given borrower approval to go ahead with short sale. Not most cases, though. 

Nov 05, 2012 02:37 PM #2
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Rainmaker
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Pamela Seley, REALTOR®

CA BRE #01824145 Real Estate - Call 951.491.4063
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