Lots of people who have been in the short sale process have been waiting for the government to make a final decision as to whether debt forgiveness would be extended into 2013. If the government did not extend the debt forgiveness act, many people in their primary properties would not be able to escape the 1099 they would be getting at the end of the year from the IRS.
As it stood, the resolution allowed up to $2 million in debt relief on a primary property. The resolution was set to expire at the end of 2012 and would expose millions of people to additional tax burdens when they could little afford the additional expense.
People would have to make some very tough decisions about their short sale. They could close them and hope for the best or they could just let them go to to foreclosure. My bet is most people would just let them go to foreclosure.
With the extension, people now have 12 months to get a short sale done and not have to incur any additional taxes as a result of the sale of their home.
To read more about this provision, please read the attached article:
If you had put off a short sale on your primary home, now would be the time to reconsider selling it. If you have any questions, feel free to call me or email me.