Short sale tax relief will continue in 2013 thanks to the extension of the Mortgage Debt Relief Act of 2007 and distressed homeowners in Orange County, who have been waiting to short sell, can now move forward and sell their distressed homes, without having to worry about paying taxes on any balance that remains on their homes mortgage.
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The Mortgage Debt Relief Act has only been extended to January 1st 2014 and many Orange County Realtors expect that MDRA will not be extended in 2014; what does this mean for distressed homeowners?
Any distressed or underwater homeowner should start the short sale process now because, by waiting longer to short sell, they are putting themselves in jeopardy of not being able to take advantage of the short sale option should the Mortgage Debt Relief Act not be extended next year.
Short Sale Requirements
In order to qualify for short sale, a homeowner must meet the following requirements:
- The value of the home has dropped significantly over the last few years and the homeowner is now “underwater” on the mortgage.
- Homeowner lost their job and was unemployed for a length of time.
- Primary income earner died and the spouse is not able to pay the mortgage.
- The primary income earner was in prison for a pro-longed length of time.
What Disqualifies Short Sales?
Homeowners who think that they can short sell for almost any reason are sadly mistaken.
Some of the most reasons why short sales are disqualified include the following:
- Not happy with neighbors
- Financial difficulty due to poor purchasing decisions
In order to have their short sale approved a homeowner must be able to prove that they have a real economic hardship and they would potentially be unable to pay their mortgage in the near future.
To learn more about how short sales work or to view the latest listing of Orange County Short Sales, contact Fred Sed & Associates today by calling (949) 272-0125.