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Mortgage Forgiveness Dept Relife Act of 2007: The Benifits During a Short Sale

By
Real Estate Agent with Century 21 American Homes

Mortgage Forgiveness Dept Relife Act of 2007  

 Mark Schreier LSA, (516)263-9094

On Thursday December 20th President Bush signed into law a bill passed by Congress HR:3648. This bill is also know as the Mortgage Forgiveness Debt Relief Act of 2007. The bill can be a huge help for people considering a "Short Sale" in that unpaid mortgage debt is not considered taxable income. eg: Your home has a current market value of $350,000 and your mortgage balance is $400,000 under the old law if the bank forgave the difference on  the sale you would have to declare the $50,000 as a taxable income. The new law eliminates this "Phantom Tax". Refer to HR3648 for all the details.

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