Good News for Mortgage Debt Relief

With the growing number of homeowners having difficulty making mortgage payments and faced with homes that are now not worth as much as they owe we are seeing an increase it short sales. This is where a homeowner attempts to sell the home and then convince the lender to take less than they are owed. We just received approval from a lender to move forward on one of my listings. What you may not know about these arrangements is that the homeowner must pay taxes on the amount of debt forgiven just like it was income.

Last week the House Ways and Means committee approved a bill that would relieve taxpayers of the liability due to mortgage relief. Not a law yet, but it appears to be moving through the legislative process and should be finalized soon and be retroactive to January 1, 2007.

A summary of H.R. 3648 is available at the Ways and Means Committee site.