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Port St. Lucie - Sebastian - Vero Beach St. Lucie, Martin, and Indian River counties (Treasure Coast)
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Old 01-18-2013, 09:26 AM
 
Location: Port St. Lucie, Florida
4,507 posts, read 9,205,704 times
Reputation: 1999

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Federal tax break extended to keep debt forgiven in short sale from counting as income

Florida homeowners have one more year to complete a short sale and benefit from a federal tax break that was set to expire.

Tucked into the 157-page legislation that saved the nation from the worst of the fiscal cliff is an extension of the Mortgage Debt Relief Act, which allows borrowers to exclude loan debt forgiven in a short sale, foreclosure or loan modification from counting as income on their taxes.

Tuesday's approval of the American Taxpayer Relief Act of 2012 extends its deadline to Jan. 1, 2014.

It covers only forgiven debt on principal residences and amounts up to $2 million, or $1 million if married but filing separately. The act also does not apply to second mortgages where the money was used for non-household expenses.
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Old 01-22-2013, 12:12 PM
 
1,257 posts, read 1,867,041 times
Reputation: 690
Unless home prices rise dramatically in the next year getting more people out from under the burden of owing more than their home is worth, my guess is they will extend it again. Probibly will have some "rich person" stipulation to keep those who have money from being able to claim it.
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Old 01-22-2013, 12:33 PM
 
Location: Port St. Lucie, Florida
4,507 posts, read 9,205,704 times
Reputation: 1999
You cant guess since they came down to past the last second this past time. We all, as homeowners and Realtors wanted it to be extended ....MANY did not.

There is no crystal ball since we the people do not actually make that decision
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Old 01-22-2013, 04:17 PM
 
1,257 posts, read 1,867,041 times
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Not for me but I am personally glad in one way they extended it because it helps people but on the other hand it hurts people who want or need to sell because they are moving. It's too bad interest rates were not at the point that assumable mortgages were an option.
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Old 01-22-2013, 05:01 PM
 
Location: Port St. Lucie, Florida
4,507 posts, read 9,205,704 times
Reputation: 1999
Quote:
Originally Posted by pslhomie View Post
It's too bad interest rates were not at the point that assumable mortgages were an option.
Interest rates are SO LOW ... geezz .. I remember when I RE-FINANCED my loan DOWN to 7.5% from 10.5%.. are you kidding!!

We have never had it so good with interest rates.

I remember when it was up to 17%..!!!!!!!! EVERYONE DIED... including me..! (been doing this waaayy too long! ) lol

You all have NO IDEA how good this is RIGHT NOW! This is .. take advantage and RUN rate time. Do it while we can. There is NO crystal ball what will happen down the road and no I dont have one either.

I know we all wait. and hope... and pray .. that things get better, but in the meantime if you have to move .. geezz please don't wait. It's NEVER been this low...
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Old 01-23-2013, 11:27 AM
 
1,257 posts, read 1,867,041 times
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You are correct in every way but it would be much harder to get out from under your house if they stopped giving the tax exemption for short sales. I am with you because I am only paying 2.7% on a refinanced loan from 6% just 4 years ago. That is why I can afford to hold on if I choose but others have no option if they are so far under water even with lower rates.

Also when interest rates were 17% you were also getting 12% in your money market. now it's like .12% if you are lucky.
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Old 01-24-2013, 09:20 AM
 
Location: Vero Beach
910 posts, read 2,220,236 times
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On the other side of this coin, we would consider buying a short sale home, but are concerned about the amount of time the paperwork can take. If we paid in cash, is it still a several-month process just because of the non-loan paperwork ?
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Old 01-24-2013, 10:30 AM
 
361 posts, read 750,424 times
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From what I understand most of the waiting time is not because of your loan but because of the bank that owns the property taking time to decide whether they want to sell it at the price you are offering.

Basically they take time to figure out how much of a loss they are willing to take.
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Old 01-24-2013, 10:37 AM
 
1,257 posts, read 1,867,041 times
Reputation: 690
There are other costs involved as well such as you have to hire an inspector before you make an offer. If the house turns out to be a bust then you just paid a few hundred bucks for nothing. Also the house is definately "AS IS" so if for some reason you don't have it inspected then you accept the damages.
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Old 01-24-2013, 11:18 AM
 
Location: Port St. Lucie, Florida
4,507 posts, read 9,205,704 times
Reputation: 1999
Quote:
Originally Posted by SeaLark7 View Post
On the other side of this coin, we would consider buying a short sale home, but are concerned about the amount of time the paperwork can take. If we paid in cash, is it still a several-month process just because of the non-loan paperwork ?

Short sales are now closing faster than ever- some as little as 30 days. No more waiting for up to 7 months for them. There were new laws put in to effect on when the banks have to respond. The process is MUCH faster now.

The only upset is when there are 2 mortgages on the property. The way it works the 1st mortgage gets paid first... second mortgage holder is also paid, but a very small amount. Some second mortgage holders refuse to take a small amount and cause holdups....stallllll.....
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