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New Foreclosure law that goes into affect 2013

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hisierra View Drop Down
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    Posted: July-16-2012 at 7:43am
Does anyone know how this can help current homeowners now?
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hambaba View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote hambaba Quote  Post ReplyReply Direct Link To This Post Posted: July-16-2012 at 8:51am
Are you talking about the law noted in this topic  http://mhvillages.com/forum/forum_posts.asp?TID=22555&title=could-this-save-mh ? If not do you have a link to this law?
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Post Options Post Options   Thanks (1) Thanks(1)   Quote RaiderFan Quote  Post ReplyReply Direct Link To This Post Posted: July-16-2012 at 9:05am
Originally posted by hambaba hambaba wrote:

Are you talking about the law noted in this topic  http://mhvillages.com/forum/forum_posts.asp?TID=22555&title=could-this-save-mh ? If not do you have a link to this law?
 
I have done some extensive research on the new law for 2013. Here is what I have blogged and the IRS link below.
 
You may owe federal income taxes in 2013 if you have a short sale and foreclosure. Now is the time to make the hard decision. Are you going to walk away from your underwater home? Uncle Sam is still giving homeowners until Dec 31 2012 to go through a short sale or foreclosure. But effective Jan 1 2013 the rules change, the amount a lender forgives, either in a short sale or foreclosure on a primary residence will be taxable on federal income taxes.

So if a house sold $50,000 short of what is owed on the mortgage, then the selling homeowners will owe federal income taxes on that $50,000. Homeowners would owe $12,500 if they are in the 25% bracket and $7500 if in the 15% tax section. Homeowners would be on the hook even if the house sold but the bank had not formally forgiven the loan in a letter. The banks must officially sign off in writing before Dec 31 2012 otherwise you will be paying a huge tax to IRS.

The Mortgage Debt Relief Act of 2007 generally allows taxpayers to exclude income from the discharge of debt on their principal residence per IRS guidelines. Debt reduced through mortgage restructuring as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief. Up to $2million of forgiven debt can be forgiven this year, $1million if married and filing separaely per IRS.

Homeowners declaring bankruptcy could escape paying income taxes on any cancellation of debt income if the debt is forgiven in the bankruptcy even if the debtor is solvent, said Nick Jovanivuch, a board certified tax atty in Florida.

Bankruptcy trumps everything, he said. Or homeowners might not have to pay income taxes on any cancellation of debt income by Donna White of Sacramento Bee

Here's the link for IRS

http://www.irs.gov/individuals/artic...179414,00.html
 
If you or someone you know is still waiting to make the decision to short sale, NOW is the time as it can take all of 6 months to close. To benefit from the full debt forgiveness, qualify for the cancellation of debt this is the year. Please call, text or PM me and we can meet and walk through the process and what to expect. The 2013 law does not favor the homeowner -
Joshua Anderson, Realtor
Klemm Real Estate
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Post Options Post Options   Thanks (0) Thanks(0)   Quote hambaba Quote  Post ReplyReply Direct Link To This Post Posted: July-16-2012 at 9:22am
Originally posted by RaiderFan RaiderFan wrote:

 
You may owe federal income taxes in 2013 if you have a short sale and foreclosure. Now is the time to make the hard decision. Are you going to walk away from your underwater home? Uncle Sam is still giving homeowners until Dec 31 2012 to go through a short sale or foreclosure. But effective Jan 1 2013 the rules change, the amount a lender forgives, either in a short sale or foreclosure on a primary residence will be taxable on federal income taxes.

Thank you Josh for the insight. So basically was temporary relief with the Mortgage Debt Relief Act of 2007, I wonder if congress will extend this act. 

Also the link you provided didn't work but I am assuming it was this link

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Post Options Post Options   Thanks (0) Thanks(0)   Quote RaiderFan Quote  Post ReplyReply Direct Link To This Post Posted: July-16-2012 at 9:34am
Yes, the 2007 Mortgage Debt Relief Act was originally only good through 2010. Due to the overwhelming response banks received and the benefits of the Act, Congress extended the Act from 2010 until the end of this year.
 
As far as extending it again? There has been much talk however no decision yet has been made. In fact, the Government has leaned more towards not extending the Debt Relief Act. Due to the new law going into effect in 2013 I highly doubt it will be extended.
Joshua Anderson, Realtor
Klemm Real Estate
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RaiderFan View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RaiderFan Quote  Post ReplyReply Direct Link To This Post Posted: July-16-2012 at 9:34am
Also the link you provided didn't work but I am assuming it was this link

 
Yes, correct link - thanks!
Joshua Anderson, Realtor
Klemm Real Estate
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Dandro View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Dandro Quote  Post ReplyReply Direct Link To This Post Posted: July-16-2012 at 10:09am
I remember getting that IRS letter YEARS ago, when I had to short sale a home in early 2000's.

IRS: "Hi, you owe LOTS of money, if you survive your heart attack, please pay up"
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Post Options Post Options   Thanks (0) Thanks(0)   Quote RaiderFan Quote  Post ReplyReply Direct Link To This Post Posted: July-16-2012 at 10:27am
Dan, buddy! LOL glad you survived the heart attack...
Joshua Anderson, Realtor
Klemm Real Estate
209-688-5251
My Email
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Dandro View Drop Down
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Post Options Post Options   Thanks (0) Thanks(0)   Quote Dandro Quote  Post ReplyReply Direct Link To This Post Posted: July-16-2012 at 10:29am
hahaha actually, after the slight attack, I called them and begged for mercy. Had to pay for comps during the time frame that I was selling, fax it over to them and they forgave the debt!!!!!! it was unbelievable! $12,500 wiped clean. It was a different time then, short sales where not commonly performed that I saw.

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Post Options Post Options   Thanks (0) Thanks(0)   Quote btroncal Quote  Post ReplyReply Direct Link To This Post Posted: July-24-2012 at 9:14am
2 bills to keep an eye on to extend the deadline: HR 4202 and S2250. These were introduced by both sides on Capitol Hill this spring. Keep your fingers crossed.
www.facebook.com/catalina.realty.investments.corporation
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Michelle & Steve

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Post Options Post Options   Thanks (0) Thanks(0)   Quote gr8fun Quote  Post ReplyReply Direct Link To This Post Posted: July-26-2012 at 7:03am
Be nice if they can extend the debt forgiveness for people who really need it, but do something about all this buy and bail crap.
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