Free Pass to walk away from recourse debt on primary residence !!!

[HLS]

President Bush on Thursday (12-20) signed a measure to provide tax relief for financially strapped homeowners facing foreclosure. The new law will provide a temporary, three-year change to the tax code to eliminate any taxes home owners may face if a lender forgives a portion of outstanding mortgage debt — whether a deficiency in foreclosure, or a loan modification.

The bill, HR 3648, the Mortgage Forgiveness Debt Relief Act of 2007, had been passed by Congress earlier in the week.

*************************************************
PREVIOUS:
Congress has passed legislation that limit will provide a temporary, three-year change to the tax code to eliminate any taxes home owners may face if a lender forgives a portion of outstanding mortgage debt — whether a deficiency in foreclosure, or a loan modification.

The House on late Tuesday approved Senate-led revisions to HR 3648, the Mortgage Forgiveness Debt Relief Act of 2007, which essentially limited the tax relief measures to a three-year period. The original House version of the bill would have established a permenant exemption on forgiven debt, something the Bush administration opposed.
*****************************************
Details to follow,, as well as more foreclosures!

[HLS]

Signed by president on 12-20-2007

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648

[drunkle]

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648&tab=summary

10/4/2007–Passed House amended.

Mortgage Forgiveness Debt Relief Act of 2007 - Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence. Limits to $2 million the excludable amount of such indebtedness. Reduces the basis of a principal residence by the amount of discharged indebtedness excluded from gross income. Disallows an exclusion for a discharge of indebtedness on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer. Sets forth rules for determining the allowable amount of the exclusion for taxpayers with nonqualifying indebtedness and who are insolvent.


hmm. what’s that mean?


Extends through 2014 the tax deduction for mortgage insurance premiums.

didn’t know ins was deductible..


Sets forth alternative tests for qualifying as a cooperative housing corporation for purposes of the tax deduction for payments to such corporations. Qualifies a corporation if: (1) 80% or more of the total square footage of the corporation's property is used or available for use by its tenant-stockholders for residential purposes, or (2) 90% of the corporation's expenditures are for the acquisition, construction, management, maintenance, or care of its property for the benefit of the tenant-stockholders.
Limits the exclusion from gross income of gain from the sale of a principal residence by denying an exclusion of the gain that is allocable to a nonqualified use of such residence (i.e., use other than as a principal residence).

tax exemption for hoa’s?


Amends the Tax Increase Prevention and Reconciliation Act of 2005 to increase to 116.75% the estimated tax rate in the third quarter of 2012 for corporations with assets of not less than $1 billion.


and what is this?

[Eugene]

Out of curiousity, found the transcript of the discussion of this bill in the House.

Everyone was talking about rising foreclosures and dealing with “unfairness” of the existing system. One or two dissenters tried to criticize the fact that the bill increases some other taxes to offset costs. The thought that the bill might spur foreclosures hasn’t even crossed anyone’s mind.

[Eugene]

Out of curiousity, found the transcript of the discussion of this bill in the House.

Everyone was talking about rising foreclosures and dealing with “unfairness” of the existing system. One or two dissenters tried to criticize the fact that the bill increases some other taxes to offset costs. The thought that the bill might spur foreclosures hasn’t even crossed anyone’s mind.

[Eugene]

Out of curiousity, found the transcript of the discussion of this bill in the House.

Everyone was talking about rising foreclosures and dealing with “unfairness” of the existing system. One or two dissenters tried to criticize the fact that the bill increases some other taxes to offset costs. The thought that the bill might spur foreclosures hasn’t even crossed anyone’s mind.

[Eugene]

Out of curiousity, found the transcript of the discussion of this bill in the House.

Everyone was talking about rising foreclosures and dealing with “unfairness” of the existing system. One or two dissenters tried to criticize the fact that the bill increases some other taxes to offset costs. The thought that the bill might spur foreclosures hasn’t even crossed anyone’s mind.

[Eugene]

Out of curiousity, found the transcript of the discussion of this bill in the House.

Everyone was talking about rising foreclosures and dealing with “unfairness” of the existing system. One or two dissenters tried to criticize the fact that the bill increases some other taxes to offset costs. The thought that the bill might spur foreclosures hasn’t even crossed anyone’s mind.

[drunkle]

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648&tab=summary

10/4/2007–Passed House amended.

Mortgage Forgiveness Debt Relief Act of 2007 - Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence. Limits to $2 million the excludable amount of such indebtedness. Reduces the basis of a principal residence by the amount of discharged indebtedness excluded from gross income. Disallows an exclusion for a discharge of indebtedness on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer. Sets forth rules for determining the allowable amount of the exclusion for taxpayers with nonqualifying indebtedness and who are insolvent.


hmm. what’s that mean?


Extends through 2014 the tax deduction for mortgage insurance premiums.

didn’t know ins was deductible..


Sets forth alternative tests for qualifying as a cooperative housing corporation for purposes of the tax deduction for payments to such corporations. Qualifies a corporation if: (1) 80% or more of the total square footage of the corporation's property is used or available for use by its tenant-stockholders for residential purposes, or (2) 90% of the corporation's expenditures are for the acquisition, construction, management, maintenance, or care of its property for the benefit of the tenant-stockholders.
Limits the exclusion from gross income of gain from the sale of a principal residence by denying an exclusion of the gain that is allocable to a nonqualified use of such residence (i.e., use other than as a principal residence).

tax exemption for hoa’s?


Amends the Tax Increase Prevention and Reconciliation Act of 2005 to increase to 116.75% the estimated tax rate in the third quarter of 2012 for corporations with assets of not less than $1 billion.


and what is this?

[drunkle]

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648&tab=summary

10/4/2007–Passed House amended.

Mortgage Forgiveness Debt Relief Act of 2007 - Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence. Limits to $2 million the excludable amount of such indebtedness. Reduces the basis of a principal residence by the amount of discharged indebtedness excluded from gross income. Disallows an exclusion for a discharge of indebtedness on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer. Sets forth rules for determining the allowable amount of the exclusion for taxpayers with nonqualifying indebtedness and who are insolvent.


hmm. what’s that mean?


Extends through 2014 the tax deduction for mortgage insurance premiums.

didn’t know ins was deductible..


Sets forth alternative tests for qualifying as a cooperative housing corporation for purposes of the tax deduction for payments to such corporations. Qualifies a corporation if: (1) 80% or more of the total square footage of the corporation's property is used or available for use by its tenant-stockholders for residential purposes, or (2) 90% of the corporation's expenditures are for the acquisition, construction, management, maintenance, or care of its property for the benefit of the tenant-stockholders.
Limits the exclusion from gross income of gain from the sale of a principal residence by denying an exclusion of the gain that is allocable to a nonqualified use of such residence (i.e., use other than as a principal residence).

tax exemption for hoa’s?


Amends the Tax Increase Prevention and Reconciliation Act of 2005 to increase to 116.75% the estimated tax rate in the third quarter of 2012 for corporations with assets of not less than $1 billion.


and what is this?

[drunkle]

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648&tab=summary

10/4/2007–Passed House amended.

Mortgage Forgiveness Debt Relief Act of 2007 - Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence. Limits to $2 million the excludable amount of such indebtedness. Reduces the basis of a principal residence by the amount of discharged indebtedness excluded from gross income. Disallows an exclusion for a discharge of indebtedness on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer. Sets forth rules for determining the allowable amount of the exclusion for taxpayers with nonqualifying indebtedness and who are insolvent.


hmm. what’s that mean?


Extends through 2014 the tax deduction for mortgage insurance premiums.

didn’t know ins was deductible..


Sets forth alternative tests for qualifying as a cooperative housing corporation for purposes of the tax deduction for payments to such corporations. Qualifies a corporation if: (1) 80% or more of the total square footage of the corporation's property is used or available for use by its tenant-stockholders for residential purposes, or (2) 90% of the corporation's expenditures are for the acquisition, construction, management, maintenance, or care of its property for the benefit of the tenant-stockholders.
Limits the exclusion from gross income of gain from the sale of a principal residence by denying an exclusion of the gain that is allocable to a nonqualified use of such residence (i.e., use other than as a principal residence).

tax exemption for hoa’s?


Amends the Tax Increase Prevention and Reconciliation Act of 2005 to increase to 116.75% the estimated tax rate in the third quarter of 2012 for corporations with assets of not less than $1 billion.


and what is this?

[drunkle]

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648&tab=summary

10/4/2007–Passed House amended.

Mortgage Forgiveness Debt Relief Act of 2007 - Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence. Limits to $2 million the excludable amount of such indebtedness. Reduces the basis of a principal residence by the amount of discharged indebtedness excluded from gross income. Disallows an exclusion for a discharge of indebtedness on account of services performed for the lender or any other factor not directly related to a decline in the value of the residence or to the financial condition of the taxpayer. Sets forth rules for determining the allowable amount of the exclusion for taxpayers with nonqualifying indebtedness and who are insolvent.


hmm. what’s that mean?


Extends through 2014 the tax deduction for mortgage insurance premiums.

didn’t know ins was deductible..


Sets forth alternative tests for qualifying as a cooperative housing corporation for purposes of the tax deduction for payments to such corporations. Qualifies a corporation if: (1) 80% or more of the total square footage of the corporation's property is used or available for use by its tenant-stockholders for residential purposes, or (2) 90% of the corporation's expenditures are for the acquisition, construction, management, maintenance, or care of its property for the benefit of the tenant-stockholders.
Limits the exclusion from gross income of gain from the sale of a principal residence by denying an exclusion of the gain that is allocable to a nonqualified use of such residence (i.e., use other than as a principal residence).

tax exemption for hoa’s?


Amends the Tax Increase Prevention and Reconciliation Act of 2005 to increase to 116.75% the estimated tax rate in the third quarter of 2012 for corporations with assets of not less than $1 billion.


and what is this?

[HLS]

Signed by president on 12-20-2007

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648

[HLS]

Signed by president on 12-20-2007

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648

[HLS]

Signed by president on 12-20-2007

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648

[HLS]

Signed by president on 12-20-2007

http://www.govtrack.us/congress/bill.xpd?bill=h110-3648

[cashflow]

Okay, so I don’t have the time to read through all of this, but what does this really translate too? If they are able to renegotiate a lower loan/rate on their outstanding mortgage than their taxes will readjust to this as well???

Someone with better CPA knowledge explain!

[HLS]

On the surface this isn’t that complicated.

Renegotiating a lower loan/rate does NOT constitute cancelation of debt…(COD)
Having a foreclosure (or short sale) does.

Now there appears to be NO REASON to want to deal with a short sale, just stay in the property as long as you can without paying, and get foreclosed on.

Your credit gets whacked, but you no longer have any income tax liability from a 1099-C for COD if you have recourse debt.

Cannot believe that this is that simple, and they didn’t understand it would be a FREE PASS from recourse debt.

If it IS actually that simple, how long will it be until it gets repealed/overturned ??

Assuming that it is a free pass, and will take 6-7 months minimum to go to trustee sale, I can see NOD’s skyrocketing beyond imagination by April-May, and foreclosure sales in August being the highest in history by a huge multiple….
BUT what if they change this program in the 1st or 2nd Q 2008 when they realize what has happened ??

Can you believe that they didn’t know this would encourage FC’s ?
*********************
Private Mortgage Insurance WAS tax deductible for the first time ever in 2007, with income limitations, but ONLY for 2007….
The deduction was just extended for 3 more years.

[sd_bear]

So they work out a horribly elaborate plan to save the banks with freezing teaser rates, and then they go on and sign something like this which has the opposite effect by flooding the banks with the unwanted foreclosures.

We live in amazing times. This decline is really going to pick up speed.

[HLS]

It seems TOO EASY,, what’s the catch ??

It’s like when Disneyland went from ticket books (If you’re under 50, they used to have A-E tickets for rides) to unlimited rides…. YEE HAA,,, get in line.

[DaCounselor]

I haven’t had time to fully evaluate this bill, but my very preliminary thoughts are as follows:

The bill appears to specifically encompass “acquisition indebtedness” only; therefore, it appears that loans taken to purchase the oft-cited Hummer, European vacation, yacht, etc, may not be excluded from cancellation of debt taxation.

The bill does not provide for a free-pass from recourse debt as it does not appear to restrict a lender from pursuing a deficiency judgment. It appears to be a tax bill only. And it’s not a free-pass re taxation, as described above.

At first blush this bill appears to be most favorable to those with considerable assets – ie, those who would not be found insolvent at the time of foreclosure/short sale. Those who are insolvent are already protected from cancellation of debt taxation, so this bill appears to have no relation to them.

I look forward to actually digging into this bill (after much Christmas shopping) and seeing all the fine print.

[HLS]

I cannot believe that the president signing this on 12-20 didn’t get HUGE nationwide MSM coverage…
I’m not sure what that tells me…

Details are still a bit cloudy, but it appears that this may ONLY pertain to purchase money loans and not refi’s.

Although purchase loans are already NON-recourse in CA, they could previously have been recourse debt in many other states.
HR 3648 looks to make purchase loans NON-recourse in all states, and does NOT make refi loans anything different than they have been, which is recourse debt.

Even so, it may not affect CA one bit, but it will encourage people in other states to be foreclosed on, adding to the national problem and keeping media attention focused on it.

[patientrenter]

HLS, can you quote the part that makes purchase loans non-recourse in all states? DaC didn’t seem to think it did that.

Patient renter in OC

[HLS]

Mortgage Forgiveness Debt Relief Act of 2007 – Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence.

This is still confusing…No IRS tax liability from a 1099-C.

It does not address a lender seeking a deficiency judgment OR whether that is a possibility.

Do you have a different understanding of this ??

WHY did it not make headlines ??

[temeculaguy]

HLS, The banks have abandoned the subprime bailout fund.

http://www.cnbc.com/id/22361874

With the no penalty for foreclosure law and no help coming, I think you are right about the future foreclosure situation in 2008. Last weekend when I went looking at some foreclosures you wrote on another post about picking out a girl in the bar at 7:30 (which is an analogy I can understand). Now this means there is a busload of strippers on their way to the bar. Thanks for the advice, I took it and I’m going to await the arrival of the first bus because it’s all shaping up to fall apart in 08. But cutting off the aid and paving the “walk away” route, the government intervention is actually going to make this worse than if they had done nothing, brilliant!!!

[HLS]

TG…

I was waiting for a reply to that [email protected] 🙂
I knew that you understood even before I gave the analogy.

The SIV fund was doomed from the beginning, just a feeble attempt to distract the sheople.

It seems that the HR isn’t going to change what already exists in CA, but WILL affect nationwide housing.

Even the CEO of BofA this week stated that he is surprised that people are current on credit cards, but behind on mortgage payments.

DUH!!
With credit cards in hand, they can run a tab at the bar, waiting for the strippers to show up.
There is going to be so much talent to choose from, maybe an 8pm choice will still be awesome.
I guess if you can “afford” it, take your pick at 8pm, and stop by again around 1am and pick up another one!

What the hay, they are going to be cheap. Just have the stamina!

I am working on something else that is puzzling me…

[HLS]

TG…

I was waiting for a reply to that [email protected] 🙂
I knew that you understood even before I gave the analogy.

The SIV fund was doomed from the beginning, just a feeble attempt to distract the sheople.

It seems that the HR isn’t going to change what already exists in CA, but WILL affect nationwide housing.

Even the CEO of BofA this week stated that he is surprised that people are current on credit cards, but behind on mortgage payments.

DUH!!
With credit cards in hand, they can run a tab at the bar, waiting for the strippers to show up.
There is going to be so much talent to choose from, maybe an 8pm choice will still be awesome.
I guess if you can “afford” it, take your pick at 8pm, and stop by again around 1am and pick up another one!

What the hay, they are going to be cheap. Just have the stamina!

I am working on something else that is puzzling me…

[HLS]

TG…

I was waiting for a reply to that [email protected] 🙂
I knew that you understood even before I gave the analogy.

The SIV fund was doomed from the beginning, just a feeble attempt to distract the sheople.

It seems that the HR isn’t going to change what already exists in CA, but WILL affect nationwide housing.

Even the CEO of BofA this week stated that he is surprised that people are current on credit cards, but behind on mortgage payments.

DUH!!
With credit cards in hand, they can run a tab at the bar, waiting for the strippers to show up.
There is going to be so much talent to choose from, maybe an 8pm choice will still be awesome.
I guess if you can “afford” it, take your pick at 8pm, and stop by again around 1am and pick up another one!

What the hay, they are going to be cheap. Just have the stamina!

I am working on something else that is puzzling me…

[HLS]

TG…

I was waiting for a reply to that [email protected] 🙂
I knew that you understood even before I gave the analogy.

The SIV fund was doomed from the beginning, just a feeble attempt to distract the sheople.

It seems that the HR isn’t going to change what already exists in CA, but WILL affect nationwide housing.

Even the CEO of BofA this week stated that he is surprised that people are current on credit cards, but behind on mortgage payments.

DUH!!
With credit cards in hand, they can run a tab at the bar, waiting for the strippers to show up.
There is going to be so much talent to choose from, maybe an 8pm choice will still be awesome.
I guess if you can “afford” it, take your pick at 8pm, and stop by again around 1am and pick up another one!

What the hay, they are going to be cheap. Just have the stamina!

I am working on something else that is puzzling me…

[HLS]

TG…

I was waiting for a reply to that [email protected] 🙂
I knew that you understood even before I gave the analogy.

The SIV fund was doomed from the beginning, just a feeble attempt to distract the sheople.

It seems that the HR isn’t going to change what already exists in CA, but WILL affect nationwide housing.

Even the CEO of BofA this week stated that he is surprised that people are current on credit cards, but behind on mortgage payments.

DUH!!
With credit cards in hand, they can run a tab at the bar, waiting for the strippers to show up.
There is going to be so much talent to choose from, maybe an 8pm choice will still be awesome.
I guess if you can “afford” it, take your pick at 8pm, and stop by again around 1am and pick up another one!

What the hay, they are going to be cheap. Just have the stamina!

I am working on something else that is puzzling me…

[temeculaguy]

HLS, The banks have abandoned the subprime bailout fund.

http://www.cnbc.com/id/22361874

With the no penalty for foreclosure law and no help coming, I think you are right about the future foreclosure situation in 2008. Last weekend when I went looking at some foreclosures you wrote on another post about picking out a girl in the bar at 7:30 (which is an analogy I can understand). Now this means there is a busload of strippers on their way to the bar. Thanks for the advice, I took it and I’m going to await the arrival of the first bus because it’s all shaping up to fall apart in 08. But cutting off the aid and paving the “walk away” route, the government intervention is actually going to make this worse than if they had done nothing, brilliant!!!

[temeculaguy]

HLS, The banks have abandoned the subprime bailout fund.

http://www.cnbc.com/id/22361874

With the no penalty for foreclosure law and no help coming, I think you are right about the future foreclosure situation in 2008. Last weekend when I went looking at some foreclosures you wrote on another post about picking out a girl in the bar at 7:30 (which is an analogy I can understand). Now this means there is a busload of strippers on their way to the bar. Thanks for the advice, I took it and I’m going to await the arrival of the first bus because it’s all shaping up to fall apart in 08. But cutting off the aid and paving the “walk away” route, the government intervention is actually going to make this worse than if they had done nothing, brilliant!!!

[temeculaguy]

HLS, The banks have abandoned the subprime bailout fund.

http://www.cnbc.com/id/22361874

With the no penalty for foreclosure law and no help coming, I think you are right about the future foreclosure situation in 2008. Last weekend when I went looking at some foreclosures you wrote on another post about picking out a girl in the bar at 7:30 (which is an analogy I can understand). Now this means there is a busload of strippers on their way to the bar. Thanks for the advice, I took it and I’m going to await the arrival of the first bus because it’s all shaping up to fall apart in 08. But cutting off the aid and paving the “walk away” route, the government intervention is actually going to make this worse than if they had done nothing, brilliant!!!

[temeculaguy]

HLS, The banks have abandoned the subprime bailout fund.

http://www.cnbc.com/id/22361874

With the no penalty for foreclosure law and no help coming, I think you are right about the future foreclosure situation in 2008. Last weekend when I went looking at some foreclosures you wrote on another post about picking out a girl in the bar at 7:30 (which is an analogy I can understand). Now this means there is a busload of strippers on their way to the bar. Thanks for the advice, I took it and I’m going to await the arrival of the first bus because it’s all shaping up to fall apart in 08. But cutting off the aid and paving the “walk away” route, the government intervention is actually going to make this worse than if they had done nothing, brilliant!!!

[HLS]

Mortgage Forgiveness Debt Relief Act of 2007 – Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence.

This is still confusing…No IRS tax liability from a 1099-C.

It does not address a lender seeking a deficiency judgment OR whether that is a possibility.

Do you have a different understanding of this ??

WHY did it not make headlines ??

[HLS]

Mortgage Forgiveness Debt Relief Act of 2007 – Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence.

This is still confusing…No IRS tax liability from a 1099-C.

It does not address a lender seeking a deficiency judgment OR whether that is a possibility.

Do you have a different understanding of this ??

WHY did it not make headlines ??

[HLS]

Mortgage Forgiveness Debt Relief Act of 2007 – Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence.

This is still confusing…No IRS tax liability from a 1099-C.

It does not address a lender seeking a deficiency judgment OR whether that is a possibility.

Do you have a different understanding of this ??

WHY did it not make headlines ??

[HLS]

Mortgage Forgiveness Debt Relief Act of 2007 – Amends the Internal Revenue Code to exclude from gross income amounts attributable to a discharge of indebtedness incurred to acquire a principal residence.

This is still confusing…No IRS tax liability from a 1099-C.

It does not address a lender seeking a deficiency judgment OR whether that is a possibility.

Do you have a different understanding of this ??

WHY did it not make headlines ??

[patientrenter]

HLS, can you quote the part that makes purchase loans non-recourse in all states? DaC didn’t seem to think it did that.

Patient renter in OC

[patientrenter]

HLS, can you quote the part that makes purchase loans non-recourse in all states? DaC didn’t seem to think it did that.

Patient renter in OC

[patientrenter]

HLS, can you quote the part that makes purchase loans non-recourse in all states? DaC didn’t seem to think it did that.

Patient renter in OC

[patientrenter]

HLS, can you quote the part that makes purchase loans non-recourse in all states? DaC didn’t seem to think it did that.

Patient renter in OC

[HLS]

I cannot believe that the president signing this on 12-20 didn’t get HUGE nationwide MSM coverage…
I’m not sure what that tells me…

Details are still a bit cloudy, but it appears that this may ONLY pertain to purchase money loans and not refi’s.

Although purchase loans are already NON-recourse in CA, they could previously have been recourse debt in many other states.
HR 3648 looks to make purchase loans NON-recourse in all states, and does NOT make refi loans anything different than they have been, which is recourse debt.

Even so, it may not affect CA one bit, but it will encourage people in other states to be foreclosed on, adding to the national problem and keeping media attention focused on it.

[HLS]

I cannot believe that the president signing this on 12-20 didn’t get HUGE nationwide MSM coverage…
I’m not sure what that tells me…

Details are still a bit cloudy, but it appears that this may ONLY pertain to purchase money loans and not refi’s.

Although purchase loans are already NON-recourse in CA, they could previously have been recourse debt in many other states.
HR 3648 looks to make purchase loans NON-recourse in all states, and does NOT make refi loans anything different than they have been, which is recourse debt.

Even so, it may not affect CA one bit, but it will encourage people in other states to be foreclosed on, adding to the national problem and keeping media attention focused on it.

[HLS]

I cannot believe that the president signing this on 12-20 didn’t get HUGE nationwide MSM coverage…
I’m not sure what that tells me…

Details are still a bit cloudy, but it appears that this may ONLY pertain to purchase money loans and not refi’s.

Although purchase loans are already NON-recourse in CA, they could previously have been recourse debt in many other states.
HR 3648 looks to make purchase loans NON-recourse in all states, and does NOT make refi loans anything different than they have been, which is recourse debt.

Even so, it may not affect CA one bit, but it will encourage people in other states to be foreclosed on, adding to the national problem and keeping media attention focused on it.

[HLS]

I cannot believe that the president signing this on 12-20 didn’t get HUGE nationwide MSM coverage…
I’m not sure what that tells me…

Details are still a bit cloudy, but it appears that this may ONLY pertain to purchase money loans and not refi’s.

Although purchase loans are already NON-recourse in CA, they could previously have been recourse debt in many other states.
HR 3648 looks to make purchase loans NON-recourse in all states, and does NOT make refi loans anything different than they have been, which is recourse debt.

Even so, it may not affect CA one bit, but it will encourage people in other states to be foreclosed on, adding to the national problem and keeping media attention focused on it.

[DaCounselor]

I haven’t had time to fully evaluate this bill, but my very preliminary thoughts are as follows:

The bill appears to specifically encompass “acquisition indebtedness” only; therefore, it appears that loans taken to purchase the oft-cited Hummer, European vacation, yacht, etc, may not be excluded from cancellation of debt taxation.

The bill does not provide for a free-pass from recourse debt as it does not appear to restrict a lender from pursuing a deficiency judgment. It appears to be a tax bill only. And it’s not a free-pass re taxation, as described above.

At first blush this bill appears to be most favorable to those with considerable assets – ie, those who would not be found insolvent at the time of foreclosure/short sale. Those who are insolvent are already protected from cancellation of debt taxation, so this bill appears to have no relation to them.

I look forward to actually digging into this bill (after much Christmas shopping) and seeing all the fine print.

[DaCounselor]

I haven’t had time to fully evaluate this bill, but my very preliminary thoughts are as follows:

The bill appears to specifically encompass “acquisition indebtedness” only; therefore, it appears that loans taken to purchase the oft-cited Hummer, European vacation, yacht, etc, may not be excluded from cancellation of debt taxation.

The bill does not provide for a free-pass from recourse debt as it does not appear to restrict a lender from pursuing a deficiency judgment. It appears to be a tax bill only. And it’s not a free-pass re taxation, as described above.

At first blush this bill appears to be most favorable to those with considerable assets – ie, those who would not be found insolvent at the time of foreclosure/short sale. Those who are insolvent are already protected from cancellation of debt taxation, so this bill appears to have no relation to them.

I look forward to actually digging into this bill (after much Christmas shopping) and seeing all the fine print.

[DaCounselor]

I haven’t had time to fully evaluate this bill, but my very preliminary thoughts are as follows:

The bill appears to specifically encompass “acquisition indebtedness” only; therefore, it appears that loans taken to purchase the oft-cited Hummer, European vacation, yacht, etc, may not be excluded from cancellation of debt taxation.

The bill does not provide for a free-pass from recourse debt as it does not appear to restrict a lender from pursuing a deficiency judgment. It appears to be a tax bill only. And it’s not a free-pass re taxation, as described above.

At first blush this bill appears to be most favorable to those with considerable assets – ie, those who would not be found insolvent at the time of foreclosure/short sale. Those who are insolvent are already protected from cancellation of debt taxation, so this bill appears to have no relation to them.

I look forward to actually digging into this bill (after much Christmas shopping) and seeing all the fine print.

[DaCounselor]

I haven’t had time to fully evaluate this bill, but my very preliminary thoughts are as follows:

The bill appears to specifically encompass “acquisition indebtedness” only; therefore, it appears that loans taken to purchase the oft-cited Hummer, European vacation, yacht, etc, may not be excluded from cancellation of debt taxation.

The bill does not provide for a free-pass from recourse debt as it does not appear to restrict a lender from pursuing a deficiency judgment. It appears to be a tax bill only. And it’s not a free-pass re taxation, as described above.

At first blush this bill appears to be most favorable to those with considerable assets – ie, those who would not be found insolvent at the time of foreclosure/short sale. Those who are insolvent are already protected from cancellation of debt taxation, so this bill appears to have no relation to them.

I look forward to actually digging into this bill (after much Christmas shopping) and seeing all the fine print.

[HLS]

It seems TOO EASY,, what’s the catch ??

It’s like when Disneyland went from ticket books (If you’re under 50, they used to have A-E tickets for rides) to unlimited rides…. YEE HAA,,, get in line.

[HLS]

It seems TOO EASY,, what’s the catch ??

It’s like when Disneyland went from ticket books (If you’re under 50, they used to have A-E tickets for rides) to unlimited rides…. YEE HAA,,, get in line.

[HLS]

It seems TOO EASY,, what’s the catch ??

It’s like when Disneyland went from ticket books (If you’re under 50, they used to have A-E tickets for rides) to unlimited rides…. YEE HAA,,, get in line.

[HLS]

It seems TOO EASY,, what’s the catch ??

It’s like when Disneyland went from ticket books (If you’re under 50, they used to have A-E tickets for rides) to unlimited rides…. YEE HAA,,, get in line.

[sd_bear]

So they work out a horribly elaborate plan to save the banks with freezing teaser rates, and then they go on and sign something like this which has the opposite effect by flooding the banks with the unwanted foreclosures.

We live in amazing times. This decline is really going to pick up speed.

[sd_bear]

So they work out a horribly elaborate plan to save the banks with freezing teaser rates, and then they go on and sign something like this which has the opposite effect by flooding the banks with the unwanted foreclosures.

We live in amazing times. This decline is really going to pick up speed.

[sd_bear]

So they work out a horribly elaborate plan to save the banks with freezing teaser rates, and then they go on and sign something like this which has the opposite effect by flooding the banks with the unwanted foreclosures.

We live in amazing times. This decline is really going to pick up speed.

[sd_bear]

So they work out a horribly elaborate plan to save the banks with freezing teaser rates, and then they go on and sign something like this which has the opposite effect by flooding the banks with the unwanted foreclosures.

We live in amazing times. This decline is really going to pick up speed.

[HLS]

On the surface this isn’t that complicated.

Renegotiating a lower loan/rate does NOT constitute cancelation of debt…(COD)
Having a foreclosure (or short sale) does.

Now there appears to be NO REASON to want to deal with a short sale, just stay in the property as long as you can without paying, and get foreclosed on.

Your credit gets whacked, but you no longer have any income tax liability from a 1099-C for COD if you have recourse debt.

Cannot believe that this is that simple, and they didn’t understand it would be a FREE PASS from recourse debt.

If it IS actually that simple, how long will it be until it gets repealed/overturned ??

Assuming that it is a free pass, and will take 6-7 months minimum to go to trustee sale, I can see NOD’s skyrocketing beyond imagination by April-May, and foreclosure sales in August being the highest in history by a huge multiple….
BUT what if they change this program in the 1st or 2nd Q 2008 when they realize what has happened ??

Can you believe that they didn’t know this would encourage FC’s ?
*********************
Private Mortgage Insurance WAS tax deductible for the first time ever in 2007, with income limitations, but ONLY for 2007….
The deduction was just extended for 3 more years.

[HLS]

On the surface this isn’t that complicated.

Renegotiating a lower loan/rate does NOT constitute cancelation of debt…(COD)
Having a foreclosure (or short sale) does.

Now there appears to be NO REASON to want to deal with a short sale, just stay in the property as long as you can without paying, and get foreclosed on.

Your credit gets whacked, but you no longer have any income tax liability from a 1099-C for COD if you have recourse debt.

Cannot believe that this is that simple, and they didn’t understand it would be a FREE PASS from recourse debt.

If it IS actually that simple, how long will it be until it gets repealed/overturned ??

Assuming that it is a free pass, and will take 6-7 months minimum to go to trustee sale, I can see NOD’s skyrocketing beyond imagination by April-May, and foreclosure sales in August being the highest in history by a huge multiple….
BUT what if they change this program in the 1st or 2nd Q 2008 when they realize what has happened ??

Can you believe that they didn’t know this would encourage FC’s ?
*********************
Private Mortgage Insurance WAS tax deductible for the first time ever in 2007, with income limitations, but ONLY for 2007….
The deduction was just extended for 3 more years.

[HLS]

On the surface this isn’t that complicated.

Renegotiating a lower loan/rate does NOT constitute cancelation of debt…(COD)
Having a foreclosure (or short sale) does.

Now there appears to be NO REASON to want to deal with a short sale, just stay in the property as long as you can without paying, and get foreclosed on.

Your credit gets whacked, but you no longer have any income tax liability from a 1099-C for COD if you have recourse debt.

Cannot believe that this is that simple, and they didn’t understand it would be a FREE PASS from recourse debt.

If it IS actually that simple, how long will it be until it gets repealed/overturned ??

Assuming that it is a free pass, and will take 6-7 months minimum to go to trustee sale, I can see NOD’s skyrocketing beyond imagination by April-May, and foreclosure sales in August being the highest in history by a huge multiple….
BUT what if they change this program in the 1st or 2nd Q 2008 when they realize what has happened ??

Can you believe that they didn’t know this would encourage FC’s ?
*********************
Private Mortgage Insurance WAS tax deductible for the first time ever in 2007, with income limitations, but ONLY for 2007….
The deduction was just extended for 3 more years.

[HLS]

On the surface this isn’t that complicated.

Renegotiating a lower loan/rate does NOT constitute cancelation of debt…(COD)
Having a foreclosure (or short sale) does.

Now there appears to be NO REASON to want to deal with a short sale, just stay in the property as long as you can without paying, and get foreclosed on.

Your credit gets whacked, but you no longer have any income tax liability from a 1099-C for COD if you have recourse debt.

Cannot believe that this is that simple, and they didn’t understand it would be a FREE PASS from recourse debt.

If it IS actually that simple, how long will it be until it gets repealed/overturned ??

Assuming that it is a free pass, and will take 6-7 months minimum to go to trustee sale, I can see NOD’s skyrocketing beyond imagination by April-May, and foreclosure sales in August being the highest in history by a huge multiple….
BUT what if they change this program in the 1st or 2nd Q 2008 when they realize what has happened ??

Can you believe that they didn’t know this would encourage FC’s ?
*********************
Private Mortgage Insurance WAS tax deductible for the first time ever in 2007, with income limitations, but ONLY for 2007….
The deduction was just extended for 3 more years.

[cashflow]

Okay, so I don’t have the time to read through all of this, but what does this really translate too? If they are able to renegotiate a lower loan/rate on their outstanding mortgage than their taxes will readjust to this as well???

Someone with better CPA knowledge explain!

[cashflow]

Okay, so I don’t have the time to read through all of this, but what does this really translate too? If they are able to renegotiate a lower loan/rate on their outstanding mortgage than their taxes will readjust to this as well???

Someone with better CPA knowledge explain!

[cashflow]

Okay, so I don’t have the time to read through all of this, but what does this really translate too? If they are able to renegotiate a lower loan/rate on their outstanding mortgage than their taxes will readjust to this as well???

Someone with better CPA knowledge explain!

[cashflow]

Okay, so I don’t have the time to read through all of this, but what does this really translate too? If they are able to renegotiate a lower loan/rate on their outstanding mortgage than their taxes will readjust to this as well???

Someone with better CPA knowledge explain!

[Author]

Posts