Short Sale Market Could Get Sidetracked Unless Congress Acts

The Mortgage Forgiveness Debt Relief Act of 2007 is set to expire at the end of the year, which would have a huge impact on short sales. Debt forgiven by the bank in such transactions is known as “phantom income” that is not taxable if the property sold is the taxpayer’s principal residence or if the debt is a loan secured by the home used to buy, build, or substantially improve the residence. The exception will no longer apply if the Act is allowed to expire. | Read More