Do you owe more than what your home is worth? If your property is underwater and you are experiencing hardships such as reduced income or unemployment, divorce, death in the family, bankruptcy or medical emergencies, now is the best time to consider a short sale.
Whether you are planning a San Diego short sale, one in Nevada, another in New Jersey, or that in whatever city your property is located, you should be aware that the Mortgage Forgiveness Debt Relief Act of 2007 will expire at the end of this year.
The Act is the reason why people whose mortgage debts were forgiven or cancelled by lenders were saved from paying tens of thousands of tax liabilities in the past few years. Normally, one should consider cancelled debts as income and is required to pay income taxes accordingly. Under this debt relief act, taxpayers can exclude from their taxable income the income from discharged debt on their principal residence and income realized as a result of the modification of the terms of a mortgage.
Even though Mortgage Forgiveness Debt Relief Act of 2007 will expire in December 31, it is important to start the short sale process now if you are planning on one. Short sale transactions usually take about three to nine months to complete. Delaying your decision to short sale might mean that you will not be able to avail of the benefits offered by this Act.
I advise you however, to not just jump in and do a short sale without coonsulting with the experts. Since a short sale transaction is complicated process, you should seek the services of an experienced short sale lawyer to represent you. There were cases when lenders go after homeowners after the short sale process closed because of the latter’s failure to ensure that the deficiency is waived. Having someone who is knowledgeable to negotiate on your behalf will save you from much trouble and heartaches.
The Bottom Line: If you plan to do a short sale, it is imperative that you do it now. It is also necessary to get the services of short sale attorneys to represent you and negotiate for you.
Disclosure: This is a sponsored post. Although the sponsor suggested the topic that will be discussed in this post, all points and views are 100% mine.