How Fannie Mae is leveraging technology to expand access to homeownership

Fannie Mae is taking important steps to help the mortgage industry close the racial housing gap, achieve equality within the housing industry and offer sustainable and affordable housing.

What is the next step for NAR?

In this Q&A, Senior Real Estate Reporter Matthew Blake gives us the inside scoop on what happened at NAR’s annual conference, including the latest on the DOJ investigation.

Mortgage Tech Virtual Demo Day

Tune in to our live Virtual Demo Day on December 1st at 10am CT to experience demos from the most innovative tech companies in the Servicing, Audit and Post-Close space.

What’s next for the maligned real estate appraiser?

In this episode of Houses in Motion, a series that is part of the HousingWire Daily podcast lineup, St. Petersburg, Florida-based appraiser Francois “Frank” Gregoire discusses issues in the appraisal industry.

Mortgage

Short sale tax break on verge of being extended until 2017

Included in federal spending bill expected to be signed by President Obama

Homeowners who had short sales in 2015 are about to get big break on their taxes, thanks for a massive federal spending bill that’s about to be signed into law by President Obama.

The Mortgage Debt Forgiveness Act was set to expire at the end of 2015, and without an extension, any mortgage forgiveness achieved in a short sale would have been counted as income for homeowners whom banks allowed to sell their homes for less than the amount of their mortgage during 2015.

But an extension to the Mortgage Debt Forgiveness Act was included in the fiscal 2016 federal appropriations and tax relief bill, which passed both the House of Representatives and the Senate on Friday.

The bill is now awaiting the signature of President Obama, who reportedly will sign the bill into law on Friday, meaning that borrowers who had short sales in 2015 are about to be able to breath a little easier.

This is not the first year that the extension of the short sale tax break has come right down to the wire. Last year, President Obama signed the 2014 version of the short sale tax break on Dec. 29.

But what’s different in this year’s version of the short sale tax break applies not only to short sales that took place in 2015, but it also extends the short sale tax break to cover any short sales that take place in 2016 as well.

Previous extensions of the short sale tax break only covered short sales during the previous year, leaving many homeowners wondering if they were going to get stuck with a massive tax bill.

While last year’s short sale tax break was in Congressional limbo, a report from RealtyTrac estimated that in the first three quarters of 2014, there were more than 170,000 short sales representing a mortgage debt forgiveness of $8.1 billion total.

The average short sale has a mortgage forgiveness of about $75,000, which if the tax break expired would be counted as income.

RealtyTrac also estimated that the potential taxes on the average short sale to be $22,114, which would have brought the total tax liability to $2.7 billion.

But that didn’t happen last year, and it’s now one step away from not happening in 2015 or 2016.

Most Popular Articles

Will Omicron variant stop first Fed rate hike?

What does news about the spread of the new Omicron variant mean for mortgage rates? Lead Analyst Logan Mohtashami lays out what to watch.

Nov 26, 2021 By
3d rendering of a row of luxury townhouses along a street

Log In

Forgot Password?

Don't have an account? Please