At the very last minute, Congress passed legislation extending the Mortgage Debt Relief Act for homeowners who do a Short Sale through 2013. This Act was due to expire on 12/31/2012 !
The ACT says this: When a homeowner sells their home, the IRS won't treat the debt forgiven by the bank as income, which means they won't owe taxes on that amount, therefore allowed a seller to short sale their home without immense tax consequences.
I am so glad this Act was passed again. To me it means a greater share of delinquent borrowers will likely be resolved through short sale instead of foreclosures. Foreclosures depress the average sales price of neighborhoods and leave the homes abandoned with no maintenance. In a short sale, the owner can stay in the home until closing maintaining the property.
I am currently working on 6 short sales helping distressed sellers sell their home without foreclosing. Please call me if you are unable to make your current payments for a confidential discussion about short selling your home.
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