Skip to main content

Washington Post: Underwater homeowners could face extra tax burden in 2014


by Michael H. Wasserman, Attorney at Law

 The Mortgage Forgiveness Debt Relief Act expires Tuesday at midnight. Sadly and perhaps all to predictably, Congress has three bills pending that would extend tax relief for underwater home owners, but has not acted to move any of them forward for passage.

 As new years approaches, several buyer-clients and I find ourselves standing on the sidelines watching several short sales that were "all but" approved but have ground to a full stop over the last several weeks, for no apparent reason.

 Waiting to see what happens next, if / when the Sellers lenders approve any or all of these deals next year. 

  • Will Seller's attorneys advise their clients of the tax liabilities their clients will now face?
  • Will they kill deals outright
  • Delay closings until (?) Congress acts? (Will Congress act to extend the tax relief law?), or,
  • Will they sell their clients down the (tax liability) river to close contracts (and get paid)?

More on this mess, reported here.
Labels:

Popular posts from this blog

PLM Title Shuttered

Title insurance is a critically important part of any real estate transaction; or at least it should be. The title company guaranties the "quality" of an owners interest in the property - that there aren't any (unknown) liens or defects. No buyer that I work for will purchase a property without it. Title insurance is only as good as the insurer. We want to know that the insurance company, like the Rock of Gibraltar , will always be there. We want to sleep easy at night, knowing that the client is protected. That said, it was a bit distressing to see that PLM Title Company shut its doors, without any forewarning last week. Worse still, this morning's news is that there is a criminal investigation underway - and that we do not yet know why. Old timers like me shudder with memories of the great Intercounty Title debacle five years ago. Here's to hoping that this one is nothing like that one. Set aside the problems involved trying to make a claim against a defun
6 comments
Read more

FHA Loans and Condo Sales - Is Relief on the Way?

By all outward appearances, state government in Illinois has ground to a complete halt, with all eyes focused on the Governor's "problem" and all the related fal - der -rah. Its hardly business as usual in Springfield, but not everything has ground to a halt. Several new bills have been introduced this week. That is not to say that they will be of benefit to we the people. Nonetheless, the cogs and gears are turning, and we are hoping for the best. One such proposal comes from Rep. LaShawn Ford of Chicago's west side, who is himself a real estate broker and entrepreneur . He is the author of House Bill 155 , introduced & referred to the Rules Committee Wednesday. It seeks to address one of the most common problems I am seeing in condominium resale transactions these days; the tension between many Declarations of Condominium and FHA loan guidelines. Many Condo Declarations provide Associations with a "right of first refusal," which basically allows t
3 comments
Read more

MAYOR DALEY PROPOSES TIF FINANCING FOR SOME DISTRESSED PROPERTIES

Lets see how City Council reacts on this one, but the Mayor introduced a pretty interesting little ordinance that might be a real boon to first time area home buyers willing to buy and rehabilitate some bank-owned properties. Progress Illinois reports that the mayor's bill, introduced on March 9: "seeks to tackle the growing problem of vacant homes that are blighting neighborhoods across Chicago, and in particular in minority communities. Called the Vacant Building TIF Purchase and Rehabilitation Ordinance, the  bill  (PDF) proposes allowing residents with a household income no greater than 100 percent of the regional median income to apply for a tax increment financing (TIF) grant that would pay for up to 25 percent of the cost of purchasing and rehabilitating an empty residential property. Single-family empty homes or units in condo and cooperative buildings with four units or fewer are eligible. The empty homes must be located in a TIF district and must be in need of
Post a Comment
Read more