Search Results for: mortgage debt forgiveness relief act

Mortgage Forgiveness Debt Relief Act Extended for 2013

Homeowners facing the possibility of short sale or foreclosure got a little bit of good news this month.  As part of the “Fiscal Cliff” deal reached by Congress, the Mortgage Forgiveness Debt Relief Act was extended until the end of 2013.  According to Forbes.com, homeowners who go through a short sale or foreclosure (on their primary […]

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Time Running Out on Tax Forgiveness for Short Sales

One of the most important pieces of real estate and tax legislation is set to expire at the end of 2012.  The Mortgage Forgiveness Debt Relief Act has benefited countless borrowers who have sold their home in a short sale and had their debt “forgiven” by their lender. For a brief explanation of how this […]

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What Every Seller Should Know About Cancellation of Debt in a Short Sale

The basic premise behind a short sale is that the seller will negotiate with their lender to sell the house for less than what is owed.  If the lender also agrees to “cancel” or “forgive” the short amount, then there may be a resulting tax liability for that amount.  According to a recent article on […]

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Debt Forgiveness and Taxation

One of the most important laws regarding short sales is the Mortgage Forgiveness Debt Relief Act of 2007.  Specifically, this law applies to short sales because the lender has forgiven or canceled debt, and now the seller may have taxable income.  The IRS says: If I sold my home at a loss and the remaining […]

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What does the Fiscal Cliff mean for Short Sales?

By now, we’ve all heard of the looming “fiscal cliff” that awaits us if Congress doesn’t come to an agreement on tax legislation by the end of 2012.  There are several tax laws that must be extended, modified, or allowed to expire, but one is of particular importance to the real estate industry. The Mortgage […]

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Short Sale Terms

Below is a glossary of common short sale terms. Appraisal An appraisal is typically ordered by the short sale lender after a contract is received.  In most cases, the lender doesn’t know what the property is worth until they order a property valuation, which may be an appraisal or BPO.  Appraisals are usually more expensive […]

Frequently Asked Questions about Short Sales

What is a Short Sale? There is really nothing “short” about a short sale.  Many people refer to them as “quick” sales, but they are mistaken about what a short sale really is.  The easy definition is this: A short sale is a real estate sale in which the net proceeds of the transaction are […]