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SOURCE: Peak Corporate Network
In light of housing’s strong recovery in 2012, the continuance of existing tax breaks for short sales and other debt restructuring methods is critical to continue the momentum into 2013.
Woodland Hill, CA (PRWEB) January 04, 2013
With the economy facing drastic cuts in services and across-the-board tax increases threatening to trigger a new recession, Eli Tene, Principal and Managing Director of the Peak entities congratulates lawmakers in Washington on granting extension of the Mortgage Forgiveness Debt Relief Act through the end 2013.
“Both distressed homeowners and the real estate industry benefitted from the relief provided through a variety of loss mitigation tactics,” says Tene, “especially with the short sale solution affording homeowners a way out of mortgage debt they could no longer bear and providing lenders a more palatable way to dispose of distressed assets.” Before the Mortgage Debt Relief Act became law in 2007, debt forgiven in a debt restructuring, short sale or foreclosure transaction could be treated as taxable income. As the housing crisis deepened, it made sense to allow taxpayers to exclude income from the discharge of debt on their principal residence. Moreover, the Act brought much-needed relief to foreclosure victims during the height of the housing crisis due to the fact that losses incurred by lenders on foreclosed properties were classified as borrower taxable income. “The Mortgage Debt Relief Act was the next logical step to incentivize both homeowners and lenders to embrace debt restructuring while providing genuine help to families who lost their homes, and its extension on January 1st bodes well to continue to stabilize the industry,” states Tene.
As recent data reflects that over 2 million distressed properties are either in some form of delinquency on mortgage payments or in foreclosure, Tene is quick to point out the impact of short sales on reducing the backlog of distressed inventory and jumpstarting the housing recovery. The Peak entities has long been a proponent of short sales, long before it gained favor with lenders and accurately predicted that short sales would prevail as the best prescription for addressing looming foreclosures across the country. “Short sales alone comprised approximately 22% of all residential sales in 2012, and the housing recovery has been an instrumental part of the nation’s economic growth this past year. While Washington’s focus on the global budget cuts and tax increases as we neared the cliff is understandable, inertia on any legislation that could potentially scuttle any momentum achieved in the housing sector would have proved as equally a devastating setback to the economy at-large.” Raffi Tal, Executive VP of I Short Sale, Inc., one of the Peak entities specializing in short sale negotiations and loan workout solutions on behalf of consumers, has overseen thousands of short sale transactions since inception of the Mortgage Debt Relief Act in 2007 and understands the benefit of the legislation from the homeowner perspective. The short sale process should be one that “allows distressed households a rebooting of their financial calamity,” observes Tal. “Only by removing the threat of taxation from short sale transactions will consumers get the complete fresh start they deserve.”
“It’s encouraging,” Tene concludes, “that lawmakers recognized the significance of extending the Mortgage Debt Relief Act through the end of 2013. The nation’s economic future is dependent on continued support of any programs, cures, or solutions in place that support housing, especially those that relieve distressed homeowners of additional tax burdens as they attempt fresh starts.”
As a leading authority in the real estate industry, The Peak Corporate Network entities provide a full array of comprehensive real estate services nationwide including brokerage services, mortgage financing, loan servicing, escrow services, short sales, foreclosure processing and 1031 exchange. For more information, visit http://www.peakcorp.com.
The Peak Corporate Network is a brand represents a group of related separate legal entities, each providing its unique set of real estate services.
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