We at Fred Sed & Associates have been urging distressed homeowners who have been considering short sale, to act quickly because the Mortgage Debt Relief Act is set to expire on December 31st 2012 and this important piece of legislation might not get extended once January 1st 2013 arrives. With the discussions of the Fiscal Cliff looming at the same time, and the need for additional tax revenue to avoid the debt ceiling, it is just as likely that Congress may not add this to the negotiations when discussing legislation on the Fiscal Cliff.
In the third part of this four part series were going to cover how the Mortgage Debt Relief Act of 2007 has helped distressed homeowners and what it’s expiration will mean for the United States housing market.
The Housing Market In January 2013
If MDRA is not extended in January 2013, more distressed homeowners will likely remain in their homes, even though those homes are possibly not worth as much as their mortgages, instead of choosing to Short Sell them. While this may sound good on the surface in order to avoid another instance of Moral Hazard avoidance, the MDRA has allowed distressed homeowners more flexibility whether it is the need to move closer to elderly parents or accept a new job opportunity in another area. The Short Sale option with the addition of the MDRA has enabled homeowners throughout Orange County and the U.S. to get out from under their distressed homes and start over financially.
With more homeowners across the country choosing to stay in their distressed homes, the United States housing recovery will likely begin to slow down since their will be less Short Sales on the market, and that means there will be less home inventory as well for those who would otherwise be able to buy.
Makes Sense To Renew MDRA Right?
Orange County real estate agents and homeowners across the country almost universally agree that it makes sense to renew the Mortgage Debt Relief Act of 2007 because of the obvious benefits that it’s brought to the U.S. housing market. This sentiment is also echoed by many politicians in Washington, like Rep. Jim McDermott, who recently voiced his support for extending MDRA and said that any gains the U.S. housing market has made could be washed away but will the voices of reason be listened to and will MDRA be extended?
If you’re an underwater homeowner and want to learn more about the Mortgage Debt Relief Act of 2007 or you’re interested in short selling our home, contact our team of experienced Orange County Short Sale Realtors at Fred Sed & Associates by calling or texting (949) 272-0125.