Released via PRWeb January 4, 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.
Read the full PRWeb press release here.