Jason Bernabei, TriCastle Realty & Mortgage, The Realty Insiders
“Fiscal Cliff UNCHAINED: Mortgage Forgiveness Debt Relief Act Extended!”
DEL MAR: January 7, 2013 – Happy New Year San Diego!!! I’ve been waiting all week for this Monday to come around, so I could share the good news that so many of us Realtors with short sale listings were waiting for! I have 4 listings and 8 very happy clients now that the dust has settled over the Fiscal Cliff! Of course that aforementioned good news would be not only the satisfactory resolution to The Fiscal Cliff sage, but an extension of the MFDRA! The what?? …
The Mortgage Forgiveness Debt Relief Act has been extended through 2013, and this means even more financial relief to distressed home-owners short-selling this January and beyond. The MFDA, which was scheduled to expire at the end of 2012, effectively waives forgiveness of mortgage debt from being counted as taxable income. That applies mainly to short sales of homes, or lender-approved sales for less than the principal mortgage balance. For example, a homeowner who owes $350,000 on their mortgage and short sells for $275,000 would have been taxed on the $75,000 difference, thus very likely placing them in a higher tax bracket.
Now imagine what would have happened to the short sale market, and the overall real estate market had the MFDRA not been extended? Real estate sales tank further, bankruptcies spike even higher nationally, and foreclosure actually becomes a more attractive route for short sellers. I don’t know about my colleagues and competitors in the industry, but I prefer my 4 short sale listings to close in 13, and I’m looking to round up more! I’m curious your thoughts! You can send me your thoughts at jasonb@tricastle.com, or respond to this blog directly. Until next time San Diego, enjoy Year 1 A.t.C. (After the Cliff)!
Jay’s Outlook:
WONDERFUL
Jason Bernabei, TriCastle Realty & Mortgage, The Realty Insiders
