Update # 1 - Mortgage Relief Passed by Congress & Signed Into Law by the President!
On Thursday, December 20th, President Bush signed into law a bill passed by Congress: HR 3648 –Mortgage Forgiveness Debt Relief Act of 2007. Two main points are:
•    Elimination of the “phantom tax” on foreclosures, short sales or other discharges of debt on a PRIMARY RESIDENCE.
Consider this scenario: A property is worth $250,000, and the mortgage balance is $300,000. Under the old rules, if a lender forgave the $50k difference as part of a foreclosure, short sale, refinance or loan modification, the borrower had to claim the $50k as income and pay federal income taxes on that amount. The new law eliminates this “phantom tax”, and the forgiven debt is no longer treated as taxable income to the borrower as long as certain requirements are met, such as the discharged mortgage balance must be on the taxpayer’s principal residence.
•    The tax deduction for mortgage insurance premiums is now extended until December 31, 2010 instead of expiring at the end of 2007.
The same rules apply as before in terms of the income limitations etc…
You can read the full version of the bill attached to this email.

Natalia Ramírez
OPTIMA TITLE SOLUTIONS
131 Elden Street, Suite 108, Herndon, VA 20170