On Jan. 1 Congress passed an extension of the Mortgage Forgiveness Debt Relief Act as part of tax bill H.R. 8, the bill addressing the “fiscal cliff.” Originally passed in 2007, this act exempts struggling homeowners from paying taxes on debt forgiven in a short sale, foreclosure, or loan modification.
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The bill extends the act through Dec. 31, 2013, allowing underwater homeowners to once again pursue alternatives to foreclosure, such as short sales or loan modifications, without the fear of owing thousands and taxes.
“For distressed homeowners, the extension of the Mortgage Debt Relief Act is amazing news. Before this act, homeowners would negotiate a loan modification or avoid foreclosure through a short sale only to find they owed an equally unmanageable tax debt afterwards,” said Jody Durket, CDPE, Intero Real Estate.
As a Certified Distressed Property Expert and certified in the Home Affordable Foreclosure Alternative program Durket is specially trained to help homeowners who find themselves facing foreclosure. “I’m committed to helping homeowners who are struggling,” Durket said. “Too often, homeowners facing foreclosure believe there is nothing they can do, but there is.
“In fact, the options available to homeowners are better than ever. Lenders realize how much foreclosures cost, and increasingly favor short sales and other alternatives over letting a home go to foreclosure. Lenders are more willing than ever to work with homeowners and some lenders are offering home owners cash incentives to sell short,” she added.
Durket has developed a free report with more information on the Mortgage Forgiveness Debt Relief Act and the options available to homeowners facing foreclosure. This report, entitled, “Attention: Distressed Homeowners! Congress Renews Critical Homeowner Relief Program,” is accessible from her Website, JodyHelps.com.