Short Sale vs Foreclosure

Short Sale vs Foreclosure

Short Sale vs Foreclosure RealtorsMany financially troubled homeowners are aware that foreclosure is a lengthy process and many have questions about short vs foreclosure. This was sent from an attorney, Bradley Kirscher, who specializes in short vs foreclosure. 2012 is the end of the Mortgage Forgiveness Debt Relief Act of 2007 and many are curious what ramifications there are with a Short Sale vs Foreclosure.  Some have heard stories about people living in their home for years without making a payment because their lender was overburdened with defaulted loans and foreclosures.  Those stories may convince them that their best choice is to remain in their home without paying until forced to leave. That urge to remain in the home they know, coupled with the commonly-accepted notion that a Short Sale vs Foreclosure is simply too difficult to complete, keeps many people who would otherwise be qualified from listing their home for short sale.  Why go through the hassle when I could live rent-free for an indefinite period of time?  How does a Short Sale vs Foreclosure benefit me, the struggling homeowner?  Aren’t Realtors just trying to earn a commission at my expense?  These are difficult questions to answer, since the questions themselves suggest that the homeowner is unlikely to sign a listing agreement. However, now is the time to address these questions, and here is the answer: TAXES!

As a general rule, cancelled debt is treated by the IRS as income.  A mortgage lender issues an IRS Form 1099-C anytime it cancels a portion of a homeowner’s debt – whether through short sale or foreclosure (foreclosure by advertisement or “non-judicial foreclosure” in Minnesota results in the lender forfeiting the right to pursue the deficiency, so the deficiency is cancelled debt).  Under the Mortgage Forgiveness Debt Relief Act of 2007, in many circumstances the homeowner is not required to pay income tax on the cancelled debt.  However, the Act currently applies only to debt forgiven by the end of the 2012 calendar year.  HOMEOWNERS CONSIDERING SHORT SALE vs FORECLOSURE MUST ACT NOW TO ENSURE THAT THE DEBT FORGIVEN ON THEIR HOME MORTGAGE DOES NOT INCREASE THEIR INCOME TAX.  Considering the state of the market and the time it is taking for some lenders to foreclose, even homeowners that have already missed payments may find that the lender’s delay in foreclosing results in the debt being forgiven in 2013 after the Act expires. Closing a short sale prior to the end of this calendar year results in the debt being canceled in time for the homeowner to take advantage of the Mortgage Forgiveness Debt Relief Act (as long as the canceled mortgage debt was used to purchase or improve the borrower’s primary residence).  Waiting could result in the homeowner incurring income tax on the amount of the deficiency, and many markets are seeing deficiencies over $100,000.  Coupled with the difficulty in discharging tax debt through bankruptcy and the collection tools at the IRS’s disposal, waiting to “see what happens with my foreclosure” could result in a nightmare for the homeowner.

Short Sale vs Foreclosure Realtor & Attorney Information and Help

Bradley Kirscher has attached some information from the IRS website, http://www.irs.gov/ , on the tax ramifications of cancelled debt and the Mortgage Forgiveness Debt Relief Act of 2007.

For questions about Short Sale vs Foreclosure contact a short sale vs foreclosure realtor or attorney:

Bradley Kirscher

Kirscher Law Firm, PA

brad@kirscherlawfirm.com

phone: (651) 209-8440

fax: (866) 880-6386

Shakopee Builders

Shakopee Builders

If you are considering building a home, make sure to interview one of the best Shakopee builders in the business. F & B Construction builds custom homes in Minnesota and is one of the best Shakopee Builders around. F & B Construction get their name from owners Fritz and Bonnie Menden, who both currently reside in Shakopee as do many family members.

Shakopee BuildersF & B Construction

F & B Construction and the Mendens really differentiate their  homes and themselves as custom MN Builders and local Shakopee builders, because they take much pride in the product they build. They are not one of many MN builders who throw up 100 homes in a year and cut cost just to make a few extra dollars. They only use materials they would in their own house. This is exemplified by the use of quality building materials like Marvin Integrity Windows, thicker vinyl gauge siding, Hardi Product, quality stone, custom cabinets with dovetailed edges and finished on site flooring. F & B Construction also does not nickel and dime client for every “upgrade”. Many national and Shakopee builders will option out items like a sump pump. The Menden know how important dry basements are so the included sump pumps with every custom MN homes they build. Not only do they include the sump pump they take it even further and drain tile on the inside AND outside of every home they builder. This is to ensure your basement will be dry. Little precautions and attention to detail separates them from the big box builders in to make a quick buck.  F & B Construction has used many of their subcontractors for numerous years. The product you see in the model, is the product you will get every time because the same crews are used. Custom MN builders

 Custom MN Homes

If you are considering building your dream home or designing custom MN homes to get an idea. We would love to sit down a create a vision. When looking at homes so many of my client say they would like to mesh this kitchen with that master bedroom with that family room etc. Choosing a custom MN builder allow you to do that. We can build your dream home starting at around the low $200,000’s with the lot included.

 

Lot and Land For Sale to Build Your Custom Home:

Shakopee Lots For Sale

Prior Lake Lots For Sale

Savage Lots For Sale

All MN Lots For Sale