Does the Mortgage Forgiveness Debt Relief Act apply to all debts?

Congress passed a bill including, The American Taxpayer Relief Act of 2012 (Sec. 202) which extends the Mortgage Forgiveness Debt Relief Act through December 31, 2013. This legislation extends dozens of other tax cuts that have expired or are set to expire at the end of the year, including one that extends homeowners’ ability to deduct the cost of mortgage insurance on a qualified personal residence.

Under the federal tax code, all types of forgiven debt are treated as income, subject to regular taxes. Because of the Mortgage Forgiveness Debt Relief Act, homeowners who get their mortgage debt forgiven through either a short sale or loan modification won’t be taxed on the amount forgiven up to $2 million. This law was set to expire December 31, 2012. If it hadn’t been extended, any forgiven amount of debt would be considered taxable income, which would be devastating for homeowners who are already experiencing financial hardship. If you're in search of mortgage relief, a short sale is still a better option than foreclosure. 

The recommmendatiion to all my investors selling in a short sale, make sure you have a very sharp CPA! If you are in search of mortgage relief contact me at kgblady@cfl.rr.com. My team and I helped so many investors relieve mortgage distress in 2012, please reach out and let us help you!

Successful Short Sale Helps Owner with Mortgage Relief

I had an owner of a property in Hammock Trace subdivision in Melbourne, Fl approach me to rent her winter vacation home that she purchased during the real estate boom years.  She wanted to receive enough rent to cover the mortgage payment.  I placed her home on the market, but could not get the property rented for the amount the owner wanted.  The owner was very distraught, her husband was ill and she was unable to rent the property, she was at a loss. She thought because she was upside down there was no way she could sell.  I asked Agi Anderson, who is a CDPE to meet with her to discuss selling her property in a short sale. The property recently closed, we saved the owner nearly $80,000, because they did not have to pay anything towards the deficit. They did receive a 1099 from their lender, however with proper guidance from an expert CPA, they should have minimal tax to pay.

So many owners are suffering with mortgage distress because of an upside down situation.  If you have a deficit, if you are upside down, there are options for mortgage relief.   Please contact me… my team and I are here to help.

Many tenants we place plan to buy at the end of their lease.  If you’re thinking about buying and want to consider a short sale, you need to allow at least three months for processing.  The agents on the KGB Home Ownership team can set you up to receive automated MLS property alerts based on your personal preferences.  They can also help you get prequalified for financing.  If you are worried about your credit, they can also lead you in the right direction.

The short sale process helps owners with mortgage relief and tenants with exceptional buys in real estate.  Some of our tenants have an interest in purchasing the property they rent.  It’s great when we create a win/win for everyone.

Owners with No Equity Refinance with HARP

Many of our owners at Showcase Property Management who are struggling with an upside down mortgage are ecstatic when they learn they may be able to refinance using HARP. My sales administrator, Agi Anderson has been working closely with Chris Brown who is with Certified Mortgage Planners. Chris is one of Florida’s leading experts on HARP, the Home Affordable Refinance Program, one of the only programs available to help investors struggling with mortgage distress. There are qualifications to be eligible for HARP, you must have a Fannie or Freddie backed loan. Watch the short video below and Chris Brown will explain how to check if your loan is Fannie or Freddie backed:

Our aim is to help owners with mortgage relief. If you don’t qualify for HARP and you think you may want to sell, just email me at kgblady@cfl.rr.com and I will have Agi Anderson get in touch touch to explain the short sale process.

What Happens to Deficiency in a Short Sale

Over the past few years many of our owners at Showcase Property Management have been confronted with selling their property in a short sale. One of the biggest concerns is always the deficiency that results from a short sale. I found this very informative video that reviews various short sale scenarios which addresses deficiency with an investment property.

Walking away from a property and foreclosing is very damaging, a short sale is much easier to recover from, typically about two years. Lenders now prefer to avoid foreclosing and short sales  are now surpassing foreclosures.

If you are an owner struggling with an over whelming mortgage, I invite you to reach out to me for mortgage relief. Learn what’s entailed with selling property short.