Congress Grants Extension For One More Year Of the Mortgage Debt Relief Act!
Before leaving office in 2007, President Bush signed into law the Mortgage Forgiveness Debt Relief Act, which was originally passed to aid the millions of homeowners who suddenly found themselves in danger of losing their homes to foreclosure following the housing market crash. In 2009 Obama signed a three year extension of the important Benefits of this Act to Distressed Homeowners through the end of 2012.
Finally, at the last minute along with the deal to avoid the “Fiscal Cliff”, on January 1, 2013, Congress passed a one year extension of the Mortgage Forgiveness Debt Relief Act. The extension of this act, which has saved distressed homeowners more than $1 billion dollars in taxes, is great news for struggling homeowners nationwide.
Without the Mortgage Forgiveness Debt Relief Act, any debt forgiven in a short sale, foreclosure, or loan modification, could be subject to federal taxes in addition to losing their home. For homeowners facing foreclosure on primary residences, this exemption saves them from paying thousands, or even tens of thousands in taxes.
Now for one more year, homeowners can take advantage of this exemption and avoid foreclosure without the fear of an impossible tax liability.