Great news! The Mortgage Forgiveness Debt Relief Act has been extended for one year.
This means that when a mortgage debt is forgiven through homeowners and lenders negotiating a short sale, loan modification, principal reduction or foreclosure, the forgiveness amount is exempt from taxation.
This measure will help the many underwater homeowners pursuing short sales and loan modifications and stimulate our market with an increase in inventory from all those who were waiting for this extension. Homeowners should consult with their tax advisers to assess the tax implication for their personal financial situation.
We are looking forward to this being a year of opportunity in Santa Barbara real estate. Even with the uncertainty of our national economy, consumer confidence in real estate continues to grow, according to Fannie Mae’s November National Housing survey. According to the California Association of Realtors 2012 Survey of California Homebuyers, buyers are more optimistic now than they were three years ago. The survey also found that the mortgage interest deduction is extremely important to 79 percent of homebuyers across all income levels and age groups.
“It’s clear that homebuyers at all income levels and ages value the tax deductions associated with purchasing a home,” California Association of Realtors President Don Faught said. “The mortgage interest deduction plays an important role in buyers’ monthly budgeting. Without this tax advantage, housing affordability would be negatively impacted and potentially price out many would-be buyers.”
It is very important that the Realtor community here in Santa Barbara as well as local homeowners and hopeful homebuyers let their legislators know that the mortgage interest deduction and real estate tax protections are vital to real estate and our economy as a whole. The public can reach Congress by calling 202.224.3121 Monday through Friday between 9 a.m. and 6 p.m. Eastern time.
We’re expecting great things for Santa Barbara real estate in the coming months, and political action is vital to maintaining our market and local economy.
For information about what you can do and for updates on current legislation regarding California real estate, contact us at the Santa Barbara Association of Realtors, through the SBAOR Facebook page, or call Krista Pleiser, the SBAOR’s government affairs director, at 805.963.3787.