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

[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.

[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!

[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.

[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.

[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.

[Author]

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