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Tag: mortgage debt forgiveness act

The MDFRA Gets Extended; Start The Short Sale Process Today

January 8, 2013

Hi there, this is Shawn Polston with TucsonShortSaleNegotiator.com and Keller Williams Realty in Tucson, I’ve got some great news for homeowners today. Our leaders in Washington have decided to extend the Mortgage Debt Forgiveness Act for another year, so it’ll be around until the end of 2013. Given the timing involved in closing most short sales, it could be anywhere from three months to nine months, I strongly suggest that if you’re considering a short sale and you want to take advantage of the Mortgage Debt Forgiveness Act you probably don’t want to wait to get the short sale process started. It may not get extended again and even this year it took a couple of days into the year to get the job done. If you are curious whether the Mortgage Debt Forgiveness Act applies to you, we can help you figure that out with the help of a CPA.

If you have any questions, please feel free to pick up the phone and give us a call or fill out the short sale form on our website and we’ll be in touch with you soon. I’d also like to encourage you to check out our Short Sale Calculator. It can help you determine whether or not a short sale is the best financial decision for you as well as provide you with your property value. It’s very easy to use, all you have to do is enter in some of your basic mortgage information, such as interest rate, remaining principal balance and monthly mortgage payment as well as your property address. You’ll receive an email instantly outlining how much time and money it will take for your home to break even. It’s a very useful tool that a lot of homeowners in Tucson are using, so I’d like to remind you again to take advantage of this free tool on my website. Thanks again for joining me today at TucsonShortSaleNegotiator.com.

What You Need to Know About the 2012 Short Sale Tax Changes and the Mortgage Debt Forgiveness Act

December 20, 2011

Hi, this is Shawn Polston with 520shortsale.com where we are Tucson’s leading short sale team. I wanted to talk to you about something that I’ve been getting a lot of questions about lately. That is an eminent change to the tax code in the way forgiveness of debt is going to be handled with both short sales and foreclosures. After you complete a short sale, the lender is required by the IRS to issue a 1099 for the amount of debt forgiven. One common misconception is letting a house go to foreclosure changes that. It actually doesn’t. Instead it increases the amount of the 1099 typically. Typically the lenders have more costs associated foreclosures they also sell the properties for less than what we sell them for in the short sale. Back in 2007 President Bush put into place the Mortgage Debt Forgiveness act which covers you in certain situations. This can cover people from any tax liability on that 1099. In 2010 it was renewed by President Obama and it’s scheduled to go away at the end of 2012. The reason this is important is my typical short sale process takes from 3 to 6 months to complete. Sometimes it takes more or less time.

If you’re in a situation where you’re trying to decide if you should walk away from that house or you do a short sale, it’s taking the average lender 12 to 15 months to foreclose. One of the reasons I’m bringing this up is that by just simply walking away from the house you could miss out on the enormous tax savings that you’d have and get a 1099 for the foreclosure that you’re going to have significant tax implications on. I can’t tell you for sure if you would have tax implications, because a CPA has to look at your situation. The mortgage debt forgiveness act is pretty straight forward and you can read about it at IRS.gov. I’ll put a link to it on my website as well.

I’m sure you have other questions so don’t hesitate to call me or fill out the short sale request form. I really look forward to speaking with you and helping you out. Again, this is Shawn Polston with 520shortsale.com where we are Tucson’s leading short sale team.

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About Shawn Polston

Shawn has been a Realtor since 2006. Prior to becoming an agent Shawn and his wife were active real estate investors. Shawn takes his education seriously; he’s taken over 200 hours of continuing education classes, to keep up-to-date on current laws and trends. Shawn is a member of the Arizona Association of Realtors Master of Real Estate Society and a Graduate of the Realtor Institute. He is also a HAFA certified Short Sales and Foreclosure Specialist in addition to being a National Association of Realtors Short Sale and Foreclosure Resource.

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