WASHINGTON — Here's some encouraging news for financially stressed homeowners across the country: The Senate Finance Committee has approved a bipartisan bill that would extend the Mortgage Forgiveness Debt Relief Act through 2013.
Why is this important? Several reasons: The debt relief law potentially spares homeowners who receive principal reductions on their mortgages from being hit with hefty federal income taxes on the amounts forgiven. Without it, millions of owners who go through foreclosure or leave their homes following short sales would experience even more financial stress.
The bill isn't fully approved until it goes to the full Senate for a vote, though, so there's still a chance that homeowners looking to become exempt from the tax ramnifications of a short sale could miss out on the savings, especially since approving the bill comes along with a billion-dollar plus price tag, and it is an election year.
If you or someone you know needs to sell a property, please contact me immediately!