Before the Mortgage Debt Forgiveness Act, distressed homeowners had little other choice but to choose Foreclosure because they faced the prospect of having to pay taxes on the remaining balance on their mortgages if they were to choose a Short Sale vs. Foreclosure.
Fiscal Cliff Temporarily Avoided
With the extension of the Mortgage Debt Forgiveness Act the United States has avoided the fiscal cliff, at least temporarily, since this piece of legislation has only been extended until January 1st 2014.
Will Congress extended the Mortgage Debt Forgiveness Act once again in 2014? That remains to be seen. For now, any distressed homeowner in Orange County or elsewhere in the United States should move forward with their plans to get out from their underwater homes instead of waiting longer and dealing with another fiscal cliff at the end of 2013.
Short Sale Or Foreclosure?
Thanks to the Mortgage Debt Relief Act’s extension, homeowners in Orange County and across the United States face a dilemma, should they choose short sale or foreclosure? Before considering either option, a distressed homeowner should consider the following:
Short Sales – A distressed homeowner can have more of a say during the sales process. This includes the final say on how much their home sells for. Once the Short Sale is approved, the homeowner can expect the opportunity to purchase another home in as little as two years (depending on lender).
Foreclosure – An underwater homeowner who chooses foreclosure can expect to wait longer for their Foreclosure to be completed compared to Short Sales. In many instances, a Foreclosure can take at least a year to be completed and can expect to wait up to nine years, after their foreclosure, until they can buy another home.
To learn more about the Mortgage Debt Forgiveness Act, contact the experienced team of top Orange County Realtors at Fred Sed & Associates today by calling (949) 272-0125.