Comments on: Mortgage Forgiveness Debt Relief Act Passes US House

By: mike blake

mike blake — Mon, 13 Apr 2009 19:51:13 +0000

I think that I may be in trouble I own a business and the loan is coming due. I have heard that banks are giving business owners a very hard time refinancing and consolidating debt. The business has great potential, but has lost money the last two years. I have laid off most of the staff and it should turn a profit this year. Should I try to refinance the note or try to get a debt consolidation loan? Any suggestions would be greatly appreciated.

By: Sefa

Sefa — Thu, 01 Jan 2009 21:26:43 +0000

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By: The Phoenix Real Est

The Phoenix Real Est — Thu, 14 Feb 2008 15:48:44 +0000

Jennifer – What an awful position to be in. I have no good answer for you. Unfortunately there are never any guarantees in home values. Hopefully you weren't mislead that there were. I don't know where in the country you are located, but there is always the likelihood that values will begin to increase again. Of course I have no way to know if you are in a position to stick it out for the long haul.

I can't tell you if you should walk away. How much you value your credit rating is a personal thing.

Will the lender change the amount you owe? Not likely by that much, but it sure can't hurt to talk to them. They don't want your home, believe me. There are other things they may be able to do to help mitigate the situation.

By: jennifer

jennifer — Thu, 14 Feb 2008 14:24:40 +0000

I owe $420,000 on my loan for my house that I bought in 2005. It's current value is $260,000. Explain to me why I should continue paying on a house that isnt worth what I bought it for. It's like throwing my hard earned money away in the trash!! So why shouldn't I just walk a way and let it forclose?? The bank isnt going to say that they will somehow evaluate my loan and change the amount that I owe simply because my house is worth half for what I bought it for, correct??

By: Rancho Santa Fe

Rancho Santa Fe — Thu, 27 Dec 2007 12:21:32 +0000

>If I have to foreclose on the property — I would have to pay taxes on the 170,000?

This law wouldn't help you on vacant land. Not all foreclosures trigger tax bills though, depending on the state you are in, and whether or not you have a non recourse loan.

By: Jay - The Phoenix Re

Jay - The Phoenix Re — Mon, 22 Oct 2007 14:52:25 +0000

Blake – I am *not* a tax specialist, accountant, etc. And it's possible I have misinterpreted the pending legislation. It's also possible the legislation could be changed/ammended prior to passing the Senate.

My understanding of the way the law is currently structured is that your secenario *might* be correct.

Even if this legislation doesn't pass, or if it does and doesn't cover your situation, there may be other ways for you to get tax relief.

My advice would be to consult a CPA familiar with the tax consequences of foreclosure. They need to be (and likely would be) up to speed on the possibilities of this current bill as well.

By: Blake

Blake — Mon, 22 Oct 2007 13:06:42 +0000

You say "primary residence".

So, i am reading this to mean that if i purchased a vacant lot of land for 250,000 (which i still owe), and it is currently worth 80,000 and my balloon payment is due at the beginning of the year. If I have to foreclose on the property — I would have to pay taxes on the 170,000?

By: Jay - The Phoenix Re

Jay - The Phoenix Re — Wed, 17 Oct 2007 11:45:23 +0000

LVL – great questions! I have no idea when it will end. You're asking the wrong guy about government intervention as I think the gov't sticks their nose in *way* too many places already…

I do see the mainstream media reports that seem to imply every single "sub-prime" borrower out there is defaulting, or soon will. And that is simply not the case. Yes, foreclosures are up, and will probably go up for quite sometime. But the simple truth is, the vast majority of homeowners pay their mortgage and have absolutely nothing to worry about.

By: Las Vegas Lawyer

Las Vegas Lawyer — Wed, 17 Oct 2007 10:34:37 +0000

Foreclosures will increase across the country due to people taking out loans that they can't afford. When will it end? Is the government gearing to assist in the crisis? Should they stay out of it? Any thoughts?