Posted on Aug 20, 2012 in Roseville and Sacramento Short Sale FAQs

Hi I’m Mark Peek with Keller Williams Realty, one of Roseville and Sacramento’s leading short sale teams. Mortgage Debt Relief Act, what does that mean to you? Well a lot of you have asked the question of whether or not the Mortgage Debt Relief Act is going to be extended. The likelihood is it will be extended. Again the Mortgage Debt Relief Act essentially forgives the difference that could be potentially taxed in the short sale so if you owe $300,000 on a property on your balance and the net proceeds are $150,000, which means there is $150,000 that is forgiven in the short sale. The lender will send you a 1099 at the end of the tax year. Without the Mortgage Debt Relief Act, owner occupied individuals may be faced with a challenge regarding taxation. That’s a hot topic right now and recently the Senate has been pushing for an extension on this. One of the things that caught my attention is how long they are extending it for. This original law took effect in 2007 and the hope that it was going to be extended. There are still a lot of homeowners out there that are underwater on their homes.

Right now they are proposing to extend it only one year so what does that mean to you? If that’s the case and they are only going to extend it on a year by year basis then they are also thinking they will stop it. The fact that it’s only on a year extension has me a little concerned as to what is going to happen after 2013. If anyone is on the fence and considering a short sale, this bill is likely to be passed, it’s likely to happen after the election.

Again, I’m Mark Peek with Keller Williams, one of Roseville and Sacramento’s leading short sale teams and we’re here to help. If you would like more information, I would love to talk with you and see if a short sale might be a good option for you. Please contact me today and I look forward to speaking with you soon.

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