Friday, January 04, 2013
Great News!
Congress has extended The Mortgage
Forgiveness Debt Relief Act of 2007 through January 1, 2014 by way of The
American Taxpayer Relief Act of 2012 (more popularly known by the fear inducing
name of The Fiscal Cliff Bill).
If you recall, The Mortgage
Forgiveness Debt Relief Act made it so taxpayers did not have to report income
gained from debt forgiveness on their principal residence should the debt be
reduced by mortgage restructuring or in connection with a foreclosure.
The fate of the Act was in
limbo for a while as it was set to expire on December 31, 2012 with no word as
to if it would be renewed.
Here’s the provision from The
American Taxpayer Relief Act of 2012 extending the Mortgage Forgiveness Debt
Relief Act for another year:
“SEC.
202. EXTENSION OF EXCLUSION FROM GROSS INCOME OF DISCHARGE OF QUALIFIED
PRINCIPAL RESIDENCE INDEBTEDNESS.
(a) IN GENERAL.—Subparagraph
(E) of section 108(a)(1) is amended by striking ‘‘January 1, 2013’’ and
inserting ‘‘January 1, 2014’’. (b) EFFECTIVE DATE.—The amendment made by this
section shall apply to indebtedness discharged after December 31, 2012. "
To review the full Bill, click here.
Thursday, January 03, 2013
Today the Making Homes Affordable Program offered a training on the Home Affordable Unemployment Program. This program is meant to extend relief to people in default who are also without work.
Here are some bullet points to keep in mind about the program:
- At least one person on the note (not the mortgage) must be unemployed to be eligible.
- If eligible, borrowers are entered into a forbearance period where they pay a determined percentage of the mortgage for a certain amount of months (typically in HAMP this is a 3 month period but under UP it's an extended period of time determined during the evaluation process).
- This is a short term fix, not a long term alternative, after the forbearance period borrower is evaluated to determine if he/she is able to transition to HAMP or HAFA resolutions.
- Borrower does not qualify if over 12 months delinquent on mortgage.
- Clients who have previously been entered into a HAMP modification or trial period but defaulted are eligible.
Remember, if you are unemployed there is hope. Utilize the Unemployment Program while you try to find work. Good luck and happy 2013.
This blog was written by our friend Laura Palermo who works in modifying mortgages at Lieb at Law, P.C.
