The expiration of the Mortgage Forgiveness Debt Relief Act could potentially plunge the nation’s recovering housing market into another tailspin. In short sales and foreclosures, loan forgiveness has not been considered taxable income for homeowners. However, barring any last-minute changes to extend the Mortgage Forgiveness Debt Relief Act, foreclosed families may be forced to pay tens of thousands of dollars after losing their homes.
This change could have major implications for millions of Americans since nearly 22 percent of American mortgages are underwater. According to RealtyTrac, one out of every 728 housing units received a foreclosure filing in November 2012. Nationwide, there were 58,000 completed foreclosures in October 2012.
“If this legislation expires, things are going to get a lot harder for struggling American families,” said Travis Hamel Olsen, co-president of Loan Resolution Corporation. “Losing your home and then getting a giant bill from the IRS doesn’t seem right.”
Loan Resolution Corporation is the nation’s leading vendor in resolving defaulted mortgages. Since 2005, the Scottsdale-based company has provided strategic solutions to address the mortgage and real estate crisis. LRC is one of a few companies that are proficient at both resolving delinquent mortgages and selling bank-owned properties nationwide on a large scale.
If the tax cuts expire, any loan forgiveness will be viewed as taxable income. The hardest-hit states would be Nevada, Florida, Arizona, Georgia and Michigan.
“The government needs to extend this law; if they refuse to, they will be making a major mistake,” added Olsen. “Helping homeowners who are most in need is a step in the right direction toward cleaning up this mess we’re in.”
For additional information about Loan Resolution Corporation or LRC Asset Management, please visit: www.LoanResolution.com.
About Loan Resolution Corporation:
Founded in 2005, Scottsdale-based Loan Resolution Corporation is an innovative, full-service company for distressed mortgages and real estate. By using its proprietary technology that provides real-time reporting for its investors and clients, LRC specializes in the purchase of non-performing loans and real property, implementing strategies to resolve delinquent mortgages, providing property management services, and using unique approaches to sell real estate.
For additional information about Loan Resolution Corporation, please visit: www.LoanResolution.com or call (480) 455-3500.
Except for the historical information contained herein, this news release contains forward-looking statements that are subject to risks and uncertainties, including change in economic conditions of the various markets the Company serves.