Home > Blogs > California > Los Angeles County > Burbank > LA Times / NY Times â€“ Beyond the Headlines 

Linda Dye's Blog

By Linda Grigorian | Agent in Burbank, CA

LA Times / NY Times – Beyond the Headlines

End is nigh for certain tax exemptions


Currently, any debt forgiven by a lender in a short sale, loan modification, or foreclosure is exempt from federal taxation. However, that exemption is scheduled to expire Jan. 1, 2013.

Making sense of the story

Borrowers will have to count mortgage relief from lenders as income on their federal tax

returns, if the exemption is allowed to expire. That means, for example, a borrower

would have to pay taxes on a $100,000 reduction in principal owed on a loan, or a

$20,000 write-off in the amount owed after a short sale.

An extension of the tax exemption – established under the Mortgage Forgiveness Debt

Relief Act of 2007 – is a strong possibility. But given that Congress will have to grapple

with serious fiscal issues after the November elections, there is no guarantee the

exemption will emerge from those negotiations intact.

The Debt Relief Act exemption applies only to canceled mortgage debt used to buy,

build, or improve a primary residence, not a second home. The maximum exemption is

$2 million.

Reinstating the tax would undercut the the effect of the National Mortgage Settlement

reached earlier this year in the federal government’s investigation into banks’

mishandling of foreclosure documents.

Under the terms of the settlement, five of the biggest mortgage lenders must put some

$17 billion toward debt relief that enables borrowers to stay in their homes. Smaller

portions are reserved for short sales and refinancing.


Read the full story



San Francisco Chronicle

Wells Fargo faces suit over FHA loans

Federal prosecutors have filed a civil fraud suit charging Wells Fargo with “more than 10 years of misconduct” in connection with a mortgage-lending program administered by the Federal Housing Administration.

Read the full story



Sacramento Bee

Restructured HARP helping more underwater homeowners to refinance

A reworked federal effort called the Home Affordable Refinance Program, or HARP, is helping thousands more refinance, even if they’re deeply underwater on their mortgages.

Read the full story



CNN Money

New-home sales hit 2-year high

New homes sold at an annual rate of 389,000 in September, according to the Census Bureau, up 5.7 percent from the 368,000 sales pace in August.

Read the full story


The Los Angeles Times

Number of low-price homes plummets in state

Competition for lower-priced homes in California is so hot that the number of cheaper homes available for sale has sunk more than 40 percent in the last year, pushing out many would-be buyers.

Read the full story



The New York Times

V.A. loans surge in fiscal year

Mortgages guaranteed by the Dept. of Veterans Affairs surged by 50 percent in the fiscal year ended Sept. 30, as tighter credit standards on conventional financing made these programs all the more attractive to current and former military members.


Read the full story




The Los Angeles Times

Freddie Mac warns of bogus landlords renting out foreclosed homes

Freddie Mac is warning about a troubling wave of post-crash fraud: Scammers who illegally rent out foreclosed and for-sale homes to unsuspecting consumers.

Read the full story




Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer