What The Fiscal Cliff Deal Means For Struggling Homeowners
With the New Year upon us, it’s time to take a closer look at how the much-anticipated and recently passed “fiscal cliff” deal will affect homeowners in the coming year.
Congress passed a bill last week containing several provisions that impact homeowners. One such provision is the extension of the 2007 Mortgage Debt Relief Act that enables struggling homeowners to avoid paying federal taxes on forgiven mortgage debt from short sales or loan modifications.
A second provision affecting homeowners is the reinstatement of a tax deduction for mortgage-insurance premiums, including both those paid to the Federal Housing Administration (FHA) as well as private mortgage insurers.
Separate from the fiscal cliff negotiations, reports of a possible expansion to the HARP refinance program and news of the $8.5 billion dollar mortgage settlement with 10 servicers could result in even more relief for a wider net of distressed homeowners. These tax break extensions and possible program expansions could be good news to many struggling homeowners, especially since unemployment and wage reduction will likely continue to negatively affect homeowners’ finances into the New Year.
We encourage all homeowners who are worried about their financial situation to call the HPF HOPE Hotline to go over their budget and learn about their options. Counselors are available every day, around the clock, at 888-995-HOPE.