The expiration of the current tax bill allowing homeowners to skip tax consequences of short sales and foreclosures is a pressing matter in the White House these days. Some are for the renewal of the tax bill allowing for more homeowners to benefit while helping continue real estate recovery, while others are strictly opposed to the bill’s renewal. The fight in Congress over this bill is yet another reason for increased polarization among politicians.
The Two Sides
The biggest issue facing Congress this year is the federal budget and national debt crisis. Despite bi-partisan agreement in the need for urgent action and change, neither side can come to a compromise on how this issue is best addressed. The renewal of the Mortgage Forgiveness Debt Relief bill has brought further disagreement in the debate over balancing the federal budget, as the renewal of the bill is estimated to cost an additional $2 billion.
Both parties are fighting the tax cut vs. tax more issue, one that is yet to be resolved in compromise. However, the general consensus is that tax reform is necessary for a balanced budget, one that is likely to include the elimination of tax provisions. If the tax bill is not renewed before the end of the year, homeowners struggling to resolve their mortgage debts will face tough decisions and could even be left with additional financial stress in the form of tax liabilities.