WHY 2012 IS IMPORTANT TO REAL ESTATE
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One very significant issue
facing the real estate market this year is the expiration at the end of the
year of both the Mortgage Forgiveness
Debt Relief Act of 2007 and the end of the Home Affordable Foreclosure Alternatives (HAFA) program.
Under the Mortgage
Forgiveness Debt Relief Act of 2007, many homeowners are relieved of the
responsibility for paying income tax on mortgage debt forgiven through short sale,
foreclosure, or loan modification.
The HAFA program allows
certain homeowners to sell their homes as “short sales” and be relieved of any
future responsibility for the deficiency (difference between mortgage balance
and amount the home sells for).
If you are considering what to do with your property,
and the value is less than the debt on the property, there are compelling reasons
to do a short sale versus allowing the property to go to foreclosure, and there
are compelling reasons to do a short sale in 2012. Since short sales can take a long time, if you want to do a short sale to benefit
from the Mortgage Forgiveness Act and/or the HAFA program, you need to list
your property early in 2012.
With short sales and
foreclosures, you need to be concerned about future liability for the
deficiency (what your lender gets versus what’s owed on the mortgage), the
income tax implications for debt that is forgiven, and the impact on your
credit score. This can be complicated to understand and will depend on various
factors - it is imperative that you consult with qualified attorneys and
accountants.
Please contact me if you would like to understand what your property is worth in today's market, if you are interested in discussing "short selling" your home, or if you have any questions about the real estate market.
Pam Dempsey
Managing Broker
Bronzeville Properties LLC
773-548-3300 office
312-560-8498 cell
pamdempsey@msn.com