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Manu's Blog

By Manu Kapoor | Broker in Queens, NY

The expiration of the Mortgage Forgiveness Debt Relief Act.

The expiration of the Mortgage Forgiveness Debt Relief Act.

Are you & your clients are aware of what's happening on December 31st of this year? How will you get the word out to your friends, family, colleagues, and clients about the Mortgage Forgiveness Debt Relief Act?

Something very important is happening on December 31st of this year – something that might impact your life, or the lives of your friends, family, colleagues, and clients.

The expiration of the Mortgage Forgiveness Debt Relief Act.

Oddly enough, many homeowners (including those affected by the Act) are unaware of its existence, or of its ticking clock.

The Mortgage Forgiveness Debt Relief Act applies to debt relief "forgiven" between January 1, 2007 and December 31, 2012. At this point in time, it does not appear the Act will be extended.

What's really at stake? Money!

Debt "relief" comes about when a lender "forgives" debt owed by a borrower, as can happen with a short sale, foreclosure, or other type of loan "workout". Ordinarily, that forgiven amount is taxable. However, under the Act, the borrower's need to pay taxes on the amount of the forgiven debt is eliminated.

AND of course, there are caveats that come along with this tax relief. For example, the debt must be related to a principal residence. In addition, the total amount of the debt can't exceed the borrower's original mortgage loan... plus the cost of improvements made to the home.

www.goforshortsale.com

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