Ohio and foreclosures we have discussed. Here’s a wee bit of relief for families facing short sale and foreclosure:
Ways and Means Approves Mortgage Forgiveness Debt Relief Bill
Legislation would prevent families from “double whammy” of tax liability on foreclosures
WASHINGTON – The House Committee on Ways and Means unanimously approved H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007, today in response to some of the tax issues that have arisen as a result of problems in the subprime mortgage market. Under current law, debt forgiven following mortgage foreclosure or renegotiation is considered income for tax purposes, resulting in tax liability for individuals and families.The legislation advanced by the Committee today would provide relief to those families by permanently excluding debt forgiven under these circumstances from tax liability. The bill would also help would-be homeowners secure their investments through a long-term extension of the tax deduction for private mortgage insurance, and would ease restrictions for qualifying as housing cooperative corporations.
Finally, the bipartisan bill would tighten requirements taxpayers must meet to exclude gain from the sale of certain homes that have been used as a vacation home or rental property. Families dealing with the pain of a foreclosure should not have the double whammy of a large tax bill for terminating their mortgage through no fault of their own,” said Ways and Means Committee Chairman Charles B. Rangel. “I am pleased the Committee joined together to unanimously pass this critical legislation and I look forward to bringing this measure before the full House.”
H.R. 3648 has received strong support from the housing and mortgage industry. Please click here to view a summary of the legislation and letters of support for H.R. 3648.
This would relieve families the additional burden of paying taxes on the shortage of the sale of the property- one way Congress is trying to help, aren’t they generous? I do believe I caught a whiff of election year…
I currently have a subprime mortgage and am in need of some assistance please advise……….thank you
I’m wondering if I should call my mortgage lender and argue that I’m a good guy who paid my subprime mortgage consistently, and so I ought to get a reward like reduced interest or principal–or if I should just shut up and enjoy the lower interest rates on auto loans and credit cards that I get for making my payments on time.
Mr. Robertson-
Every situation is unique. Not knowing the personal details of your situation, please let me point you to more information:
http://www.homeownershipdayton.org/
http://www.themortgagereports.com/2007/10/looking-for-inf.html
It appears that once the forgiveness starts, everybody will want it. There is no reason for a person that has been paying his mortgage on time to keep paying, if his/her house has dropped significantly below the value of the loan. This country cannot afford the debt obligations it owes for Social Security, Medicare, let alone Iraq and now this payback for an 8 year spending spree? I think people may finally get it this time. What this crisis is exposing is that NY wants the country to live like the Ant, while they live like the Grasshopper. What I love about the “Free Market” is that it is holy writ, until the boys in New York have to pay the price; then, here comes the bailout.
The bailout has the potential of driving costs up for Cities and Counties. Why save a few houses in a development, while the rest fail? Stupid. But it was equally stupid for the houses to be built in the first place. The elected official’s lust to maintain power by increasing tax revenues from the new properties is coming home to roost. Nice work, while the populace is convinced by the big developers that it does need a Regional Government with expansive zoning powers that are commensurate with the NEEDS OF THE REGION. Local food production, connected greenways, mixed development, water use, land use……
I wonder if we well have the time and money to do it over again. In the declining energy and political environment, I doubt it.
Let’s not overlook that there have been hundreds of thousands of families who have already lost their homes in this crisis, and there’s no suggestion that they’ll get help. Seems like it’s now a sort of lottery; figure out when it’s the right time to default on your mortgage, and you’ll come out like a bandit; do it too early or too late, and you lose.
Who makes out like a bandit at this point? A lot of people already have, mostly mortgage salesmen and their employers, plus the servants and owners of the securitization industry. But now you have people with unaffordable mortgages on overpriced houses, due either to corrupt appraisals or a popping housing bubble. A lot of these unaffordable mortgage payments are owed to us through our mutual funds. So who is the bandit?
I am always amazed by how little sympathy ordinary people have for those who are losing their homes, and how the lending industry fights tooth and nail for the right to foreclose on mortgages even though they lose money doing that. It may be that they see a larger issue as holy writ. Everyone in debt must be made to repay or else come hell or high water, or the whole social contract and its enforcement go out the window. “If you can’t pay your mortgage, you lose your home, period.” Industry’s allies in the public are those who were lucky enough to to get caught with a bad subprime mortgage, and I guess want to be rewarded by having those unfortunate enough to believe the salesmen and to not be able to catch the traps buried in miles of complex legal mortgage documents that only expert insiders really understand, pay the ultimate price.
The loss of homes, what they mean as investments and what they mean to social cohesion and family life is a little like a Hurricane Katrina without the water. This seems like something people ought to care about, even in a consumer society where some people doing well comes at the price of other people doing badly. These days the consumer economy is based on debt, where people are supposed to borrow and spend. However we then beat up on those who are unable to pay back what they borrowed, due mostly to the vagaries of the economy and particularly the loss of jobs to the global mobility of capital to where the cheaper labor is.
The Republicans held together to block a change in the bankruptcy laws, that would essentially remove a special immunity that first home mortgages have against the bankruptcy remedy that is known in the trade as the “cram down.” This essentially means that a secured debt is not worth more than the property securing it is worth. The other aspect would be to eliminate the “explosive” adjustable rates that guarantee that after two or three years homes will be lost. Elsewhere these would be seen as inherently defective products for most people and in most circumstances, similar to a car that was going to wreck or a house that was going to fall down after 2 or 3 years. However the lending industry is still trying to figure out how it can make money off the foreclosure crisis now that the investors are seeing through the myth that subprime securitizations produce free money. We clearly need a political system where the damage done by the loss of hundreds of thousands of homes is more important than more profits for lenders
Stan, It is easy to stop foreclosure. The County Sheriff refuses to enforce the laws passed by the corrupt congress and local banking backed officials. It happened at some point during the depression, but we have a deep and abiding respect for LAW, in spite of how stacked against people it is. I do not trust New York. Good Luck!
Be Midwest! Be Obama!
Illinois over NY anyday!
In all of the foreclosure mess, caused mainly by the crooked lending companies,
no one is doing anything about the families who have lost their homes. All I hear is only “creditworthy” people deserve help. So please tell me, how did the poor families, who lost their homes to these crooks, become not creditworthy?? These
people deserve a second chance!! Wake up America!!