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Government has help create the current walk away trend.
invite response
2012 Jan 16, 11:45pm 3,073 views 5 comments
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toothfairy
2012 Jan 17, 12:11am
I still suspect that this bill was designed to ensure the system would fail. and
President Obama has been left cleaning up the mess ever since.
It's pretty convenient how this expires just after the 2012 election.
TPB
2012 Jan 17, 12:13am
I still suspect that this bill was designed to ensure the system would fail. and
President Obama has been left cleaning up the mess ever since.
Well then let's just say Obama has been ONE shitty Janitor.
So will this be extended? Or will 2013 be a good year to buy when a big wave of late-2012 foreclosures come in to get in before the deadline?
bmwman91
2012 Jan 17, 1:30am
So will this be extended? Or will 2013 be a good year to buy when a big wave of late-2012 foreclosures come in to get in before the deadline?
Well, it might not be "good" until 2014 or so. Remember, the banks are letting the foreclosures pile up so as to avoid recognizing losses on their books, AND to keep prices propped up in the housing market. There is a 3-digit number of days between the foreclosure notice and eviction/sale.
TechGromit
2012 Jan 17, 1:58am
So will this be extended? Or will 2013 be a good year to buy when a big wave of late-2012 foreclosures come in to get in before the deadline?
This raises an interesting question. If I decide to stop paying my mortgage in June of 2012 and the bank doesn't get around to foreclosing on my house until February 2013, am I still exempt from the "Form 1099-C, Cancellation of Debt" tax liability? I don't believe so. If you going to walk away, you better do it quick and then do everything in your power to speed the process along so the foreclosure is complete before December 31, 2012.
http://ochousingnews.com/news/falling-house-prices-increases-strategic-default?source=patrick.net#post-3413
I said the before and I'll say it again, The government has helped encourage people from walking away from there debt obligations, which in turn has help fuel falling prices of real estate. The Mortgage Debt Relief Act of 2007 forgives up to 2 million dollars of debt on principal residents, which allows people to walk away from debt without tax liabilities. I feel very strongly that if the tax act wasn't passed and people were made aware that they would be on the hook for tens of thousands of dollars in taxes for walking away from there mortgage debt obligations, that they would be far less likely to do so when they can afford to make the payments. The number of foreclosures would be less and thus less downward pressure on real estate prices.
Given that the country desperately needs more tax income, the tax liabilities generated from foreclosed houses could have generated a large income stream for the federal government over the last several years as well. The expiration of the The Mortgage Debt Relief Act of 2007 will do more to help stabilize prices than any boneheaded government refinance program they can come up with.
#housing