We should all re-blog and title this, "Real estate agents support the Principle Forgiveness bill -- LAST NAME," whether we are fans of the current administration or not. We must analyze issues one at a time, rather than lump them all together as "Liberal" or "Conservative."
The article below has it right: the vast majority of folks getting crushed in the tidal wave of the housing crisis are innocent victims of someone. Most are victims of government policies that said, "Everyone should own a home, even if their financial scenario does not indicate they can pay on the loan." The banking industry followed guidelines coming out of those incentives, and, yes, there was a small minority of borrowers who themselves tried to take advantage of the system, whether wrongfully or innocently.
But the government's job is to do what's best for the most, and for the most part, people who had to sell homes under water are victims. The government should pass the Principle Forgiveness bill to help them. And then banks can, in rare cases, deal with borrowers who committed wrongdoing (fraud, etc.) on a case by case basis, as those folks would not be covered by the bill, as I understand it.
Otherwise, we will spawn a vast ripple effect of lawsuits when the banks at some point sell their claims against 1000s of 1000s of borrowers to debt collectors, who will pursue "the little guys" relentlessly as debt collectors do, victimizing them yet again -- again, in the vast majority of cases
“I’m With You on This One Mr. President”
As I have shared many times in the past, I am not an advocate of our current administration. Even though he did not author the original Principle Forgiveness bill, he is jumping on the band wagon to extend this tax break, that helps individuals that lose their home through foreclosure or short sale.
Both of these events can cause a taxable result, that would further harm them financially. Without this bill, these individuals would end up owing thousands of dollars in taxes to the government. These folks have already been hurt enough.
The present bill expires at the 12/31/12. A two year extension to this bill would certainly help many folks that need this kind of help.
Obama Seeks Extension of Principal Forgiveness Tax Break
By: Brian Collins
The Obama administration is urging Congress to extend a tax provision allowing troubled homeowners that complete a short sale -- or benefit from a principal reduction -- to avoid paying taxes on the discharged amount of their loan balance.
The current tax exclusion for discharges of "qualified principal residential indebtedness" has been in effect since 2007, but is due to expire at the end of 2012. Without the QPRI exclusion, the amount of the discharged mortgage debt would by counted as income for tax purposes.
"Although there has been some improvement in the residential real estate market, there is still an elevated number of cases in which homeowners may have discharge of indebtedness income with respect to their home mortgage loans," the Treasury Department says in its new "Green Book" report.
As part of the budget process, Treasury issues the Green Book to explain all the tax proposals the administration wants Congress to act on.
The White House desires at least a two-year extension of the QRPI exclusion. "An extension beyond January 1, 2015 may be appropriate to correspond to the availability of additional homeowner relief as a result of government actions and other arrangements," Treasury says.
The $26 billion robo-signing settlement with the five mega-servicing banks provides nearly $17 billion in principal reduction modifications and short sales. The servicers have three years to complete these residential relief transactions that would result in discharges of mortgage debt.
Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
110 Main St.
Manchester, Ct. 06042
Office: 860 647-7701 x16
Fax: 860 647-8940
Cell: 860 836-9294
Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.
Lisa Delzompo (951-704-4559)
"May your home always be too small ... to hold all your friends!"
CA Dept of Real Estate, Real Estate Broker License #01379811;
NMLS Identifer #331744
REAL ESTATE: www.SandToSeaProperties.com. Covering northern San Diego, Oceanside, Temecula, Murrieta, Riverside County and desert areas of Yucca Valley, Joshua Tree and Twentynine Palms, CA.
LOANS: PRW Lending, Inc. Call direct 951-704-4559, or email me at lisa(@)sand2sea.us
Information is deemed reliable but is not guaranteed. Information is general and may not address your particular situation. Do not rely solely on this or any information you find on the internet. You should consult relevant professionals directly about your real estate, financial, etc., situation.