Broward County Homeowners: Are You Behind On Your Mortgage Payments ?
Broward County still sees a decent number of short sales and foreclosures for sale on the market in 2015 and banks are faster to proceed with foreclosure actions these days than only a few years ago.
Generally this leaves homeowners who are behind on their mortgage payments, less time to negotiate an alternate solution to a foreclosure. Sometimes homeowners only have a few weeks to prepare for a summary judgement hearing, once a lender files its foreclosure action.
Homeowners must act fast nowadays, however it is a frustrating experience to communicate and negotiate with banks ! Many homeowners simply resign into a foreclosure, too exhausted and frustrated with the process of dealing with their lender.
If it has been determined that an owner is no longer able to afford the mortgage payments, the best solution, is to negotiate a short sale with the lender, rather than being foreclosed on.
A person's credit rating can be repaired within two to three years after a short sale, whereas with a foreclosure, a person's credit rating will be affected much longer, for seven years and that obviously makes a significant difference in people's lives.
The Mortgage Forgiveness Debt Relief Act that was implemented in 2009, allowed homeowners in recent years a tax forgiveness by the IRS, on the amount that was forgiven (unpaid loan balance) by a lender, in a short sale or foreclosure of a primary residence.
In Florida the average forgiven amount is $88,500.
The IRS sees the unpaid loan balance in a short sale or foreclosure, as "taxable income" and without The Mortgage Forgiveness Debt Relief Act, homeowners would be taxed on the forgiven amount when they file their taxes.
The tax payable on $88,500 is about $22,000 and The Mortgage Forgiveness Debt Relief Act was in effect only until December 31, 2014, when it expired !
It is not known at this point, if it this tax act will be extended through 2015 and this will affect homeowners, who are facing foreclosure or a short sale in 2015!
If The Mortgage Forgiveness Debt Relief Act will not be extended for another year, then the IRS will tax a homeowner on the forgiven amount in a short sale or foreclosure that took place in 2015 !
However there is a way to fight back if an unpaid loan amount is treated as taxable income by the IRS. Homeowners can file Form 982 with their annual taxes, which is "Reduction Of Tax Attributes Due To Discharge Of Indebtness".
Homeowners who are faced with foreclosure should consult me, if they are seeking to negotiate a short sale with their bank as soon as possible.
I am a "Certified Distressed Property Expert" (CDPE)
Comments (0)Subscribe to CommentsComment