The Debt Forgiveness that people with Foreclosures and Short Sales on their Primary and investment proerties have been enjoying since 2007 expires the end of 2012. What’s going to happen? It’s an unknown. It would seem that the Debt Forgiveness would be extended since it is one of the primary reasons that people have been able to re-organize and get back on their feet.
But..there is NOTHING logical about the Lenders I we know all too well from working Short Sales for the pasat 4, almost 5 years. If they see that it will affect their own bottom lines, I suspect it will be extended. In the mean time, be sure you get your Short Sales closed by 12/31 of this year.
When I first started doing Short Sales, there was no Mortgage Debt Relief Act and I lived the nightmare of trying to get the Lenders to agree NOT TO PURSUE FOR DEFICIENCIES. It’s standard practice to have that lingo in your approval Letters, but it wasn’t then. I had many Sellers decide they were better off letting the property go to the Trustee Deed sale because in California, a non-recourse state, the bank can only take the home in lieu of debt payment. The remaining debt although 1099’d was wiped out in the Foreclosure.
Let’s see what happens..the housing market is rebounding steadily here in the Palm springs Valley. It would be a shame to set it back once again.