Congress passes legislation extending Mortgage Debt Relief Act
GOOD NEWS!! In down to the wire fashion late into the night on New Year’s Day, the 112th Congress, somewhat reluctantly, but certainly wisely, approved legislation to avert the looming “fiscal cliff” and also avoid major across the board automatic tax hikes to nearly everyone in the country. One of the actions taken in this legislation was to also extend the “Mortgage Debt Forgiveness Act”, which was set to expire at the end of 2012. The Act has been extended through the year 2013, and allows the IRS to forgive the Debt on negotiated Short Sales that would otherwise have been considered taxable income to the homeowners who were able to successfully negotiate a Short sale with their lender. This move should allow lenders and Sellers to continue to work toether to get past the Foreclosure debacle, and continue to allow the real estate market to recover enough to help lead the economic recovery of the country on the whole.