The Orlando Sentinel recently reported that the Mortgage Forgiveness Debt Relief Act of 2007 may not be renewed in 2014.

The Mortgage Forgiveness Debt Relief Act of 2007 was set in place to assist those homeowners who have gone underwater with their mortgage payments, including those faced with foreclosure.  The act ensured that forgiven mortgage debts, including those forgiven through foreclosure, would not be taxable, thus reducing the burden on the homeowner.

According to a spokesperson for Florida Senator Bill Nelson, who has been instrumental in the renewal of the act for the past few years, the Mortgage Forgiveness Debt Relief Act is unlikely to be renewed next year, since mortgage defaults are not as pressing an economic issue for the country as they were in years past.

What does this mean for homeowners?  Going forward in 2014, homeowners will have to pay taxes on mortgages that are unpaid because of a loan modification, short sale, or foreclosure.  Since about 130,000 houses in the Metro Orlando area with mortgages were financially underwater during the third quarter of this year, this change has the potential to affect a great number of people and families.

Many are pushing to close Orlando short sales by December 31st to avoid this additional tax.

Real Estate Closing Solutions is an independent Orlando title insurance and closing agency with experience in Orlando short sales that focuses on unbiased and equal servicing expertise to all parties in the real estate transaction.  To learn more about what RECS can do for you, contact us today at 407-615-8550, read our website or stop by our office.