Part of the fiscal cliff deal, the Mortgage Forgiveness Debt Relief Act got extended one more year! This is great news because homeowners will still get a break on taxation from mortgage debt that is forgiven when the homeowner and their mortgage lender(s) negotiate a Short Sale, Loan Modification or Foreclosure. Many people thought if the Mortgage Forgiveness Debt Relief Act didn't get extended, struggling homeowners will rather walk away from their home instead of doing a Short Sale. That may happen but now we won't know until 2014.
Does this mean there will be more Short Sales on the market so the inventory will go up? I say the inventory will go up a little, just not like a few years ago. I believe most of the homeowners who would consider doing a Short Sale already done it. Just by looking at the numbers of Notice of Defaults in San Diego County dropping every month proves it. See UT San Diego article
Overall this is great news as it gives homeowners relief during a tough situation. One thing to remember, everyones situation is different and not all forgiven mortgage debt is taxable. To double check your situation, please talk to a tax professional about the tax consequences of completing a Short Sale, Loan Modification or Foreclosure.
If you or you know someone who is interested in doing a Short Sale, please give me a call at 858-349-2390.
Cell: 858-349-2390 | E-Fax: 619-209-7597
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CA DRE # 01397640
Selling San Diego Real Estate since 2003
Paul CaparasDRE # 01397640
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