Are Short Sales on Their Last Legs?
One of the easiest and cheapest ways to buy a home may soon be coming to an end.
After the housing market collapse in 2008, lenders were left with a huge problem -- an excess of homes where the borrowers could no longer afford their mortgages.
So, many mortgage lending corporations made the decision to allow the homeowners to sell the property for less than the value of the mortgage, instead of going through a foreclosure. Called a "short sale", many buyers jumped at the opportunity to purchase a home for a discounted price.
Because short sales are classified as debt forgiveness, normally homeowners would have to pay taxes on the money they received in one (in fact, the IRS is supposed to count the amount of debt your lender forgives as "income"). Under the Bush tax cuts, though, short sales were given an exemption.
The only problem now is that those Bush-era tax cuts expire at the end of the year.
Without an extension from Congress, short sales might stop abruptly.
REF: http://www.realtypin.com/News/Story/808-Are-Short-Sales-on-Their-Last-Legs
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