U.S. CitiesCity-Data Forum Index
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
View detailed profile (Advanced) or search
site with Google Custom Search

Search Forums  (Advanced)
Reply Start New Thread
 
Old 10-27-2011, 07:18 PM
 
3,576 posts, read 5,907,929 times
Reputation: 1431

Advertisements

Quote:
Originally Posted by ASUFAM View Post
Thanks for the input!!! We may be faced with this!!

Wonder if the debt forgiveness act could be extended...
Who knows if it will be extended.

Government intervention into the housing market has so far provided very little relief and prolonged the correction process.

Look at it this way. If the law was never enacted. Would we have all these bargin hunters complaining why short sales take so long. Guess what? With this stupid forgives act , we wouldn't have 99% of the short sales out there.

We would have less distress properties. We wouldn't have people gaming the system by not paying for 3 years and than finally trying to get a short sale.

We need to get back to the old law. Either save the home. Or have it go into foreclosure.

There are already ways out of this mess to avoiding the 1099 cancellation debt
1. Insolvency
2. Bankruptcy

This law in my opinion has encourage people to dump their homes without facing tax consequeces. And flooding the market with more distressed properties.
Reply With Quote Quick reply to this message

 
Old 10-28-2011, 06:48 AM
 
Location: Baltimore, MD
3,701 posts, read 3,998,849 times
Reputation: 6737
Quote:
Originally Posted by aneftp View Post
Who knows if it will be extended.

Government intervention into the housing market has so far provided very little relief and prolonged the correction process.

Look at it this way. If the law was never enacted. Would we have all these bargin hunters complaining why short sales take so long. Guess what? With this stupid forgives act , we wouldn't have 99% of the short sales out there.

We would have less distress properties. We wouldn't have people gaming the system by not paying for 3 years and than finally trying to get a short sale.

We need to get back to the old law. Either save the home. Or have it go into foreclosure.

There are already ways out of this mess to avoiding the 1099 cancellation debt
1. Insolvency
2. Bankruptcy


This law in my opinion has encourage people to dump their homes without facing tax consequeces. And flooding the market with more distressed properties.
However, if you live in a non-recourse state, i.e., California, Arizona, etc., there is no 1099 issued because there is NO debt remaining and therefore nothing to be cancelled. Bankruptcy or insolvency not needed.
Reply With Quote Quick reply to this message
 
Old 10-28-2011, 09:47 AM
 
3,576 posts, read 5,907,929 times
Reputation: 1431
Quote:
Originally Posted by lenora View Post
However, if you live in a non-recourse state, i.e., California, Arizona, etc., there is no 1099 issued because there is NO debt remaining and therefore nothing to be cancelled. Bankruptcy or insolvency not needed.
Exactly, another reason why this law should be allowed to expired.

It's done nothing but create a huge market for more distress properties to flood the market (short sale market that didn't exist before).
Reply With Quote Quick reply to this message
 
Old 10-28-2011, 10:29 AM
 
Location: The Milky Way Galaxy
2,256 posts, read 5,908,493 times
Reputation: 1505
After reading this it sounds like short sales from a sellers point of view is less attractive now that they'll get taxed?
Reply With Quote Quick reply to this message
 
Old 10-28-2011, 11:27 AM
 
3,576 posts, read 5,907,929 times
Reputation: 1431
Quote:
Originally Posted by mgt04 View Post
After reading this it sounds like short sales from a sellers point of view is less attractive now that they'll get taxed?
Let's just say 99% of short sales would not even be listed if there were any tax consequences involved.

It's a huge deterrent. No one would short sale their home if they knew they would face a tax liability.

The government is losing billions in lost tax revenue because of this mortgage forgiveness act.

Say if you want to short the bank 100K. The bank gets to write off that 100K in losses (33K tax savings). The government needs to recoup that money. Government (IRS) would go after the short seller for that loss revenue. They would tax them on that 100K to recoup about 33K they lost form the bank writing off the losses.

Now, the government still allows you to claim insolvency or BK. This law was not needed.

Once this mortgage and forgiveness act goes away, 99% of short sales will disappear. Bam, less distressed sales. The market gets corrected much faster. Those who can't save their homes go into foreclosure making the sales process much easier. Or they would try to save their properties.

As of now, it is my belief that up to 10-15% of short sellers can truly afford their homes. They are shielding or hiding money from the banks. They are making it look like they are poor. I posted somewhere else where my old buddy is laughing to the bank. He just shorted the bank 300K on his beach condo in Florida. And he makes upwards to 300-400K a year. He just ramped up his spending (BMW 6 series convertible plus a new boat). Did a strategic divorce etc.

There are many ways around the system.

I asked my buddy if he would have done a short sale if he knew if would be responsible for the 100K in taxes on the 300K shorted amount. You guys already know the answer. No one in their right mine would do a short sale if they had to deal with the IRS directly who can start deducted money form their bank accounts.
Reply With Quote Quick reply to this message
 
Old 11-03-2011, 12:01 PM
 
2 posts, read 11,913 times
Reputation: 10
Default We hope!

Hopefully - luckily there are groups and campaigns out there who are trying to petition the government to extend this act. I even received a phone call about it the other day and couldn't be happier because I know how beneficial this is to people. If you would like to participate in the petition, I believe the biggest one that is going on right now is at www.homehelpact.com.

MZennburg
Reply With Quote Quick reply to this message
 
Old 12-14-2011, 12:49 PM
 
1 posts, read 961 times
Reputation: 11
Quote:
Originally Posted by mzennburg8 View Post
I found myself in this position not to long ago. The mortgage forgiveness debt relief act of 2007 is actually set to expire at the end of 2012. You might want to act soon... considering that some banks are predicting 500-600 days for your house to go through the foreclosure process. Basically, if it takes that long, then your debt won't be forgiven and you'll have to claim that as income tax... bummer.

There is a helpful website that breaks it down.. including your other options and free advice if you need to talk to a counselor - [url=http://www.HomeHelpAct.com]Debt Forgiveness Act | Mortgage Debt Forgiveness Act of 2007[/url]
So I decided to follow your advice mzennburg8 and I filled out the "need help" option on [url=http://www.homehelpact.com]Debt Forgiveness Act | Mortgage Debt Forgiveness Act of 2007[/url]. I was pleasantly surprised to have someone call me within 2 hours to talk to me about it. The guys name was Kyle Sherwood and he was a volunteer for them. It turns out my situation is a little different but they helped me save $100,000 that my mortgage company was coming after me for. The best part about it - IT WAS FREEEEEEEE!!! I talked to Kyle for about 2 hours that day plus another 3 hours the following day and it was as simple as that, no charges, no scams, just a really nice organization that is trying to take the small steps to help America out. Send me a PM if you want to chat about this further an my specific situation but I'm sure glad I contacted them.

Wish all of you luck and advise you to sign their petition to extend the mortgage forgiveness debt relief act. Follow this link if you would like to sign their petition - [url=http://www.homehelpact.com/petition-to-extend-act]PETITION TO EXTEND ACT! | Mortgage Debt Forgiveness Act of 2007[/url]
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $104,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
Follow City-Data.com founder on our Forum or

All times are GMT -6.

2005-2018, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35 - Top