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All right -- the mortgage debt relief act of 2007 is expect to expire at the end of this year and with Al.
Release homeowners who back out of their mortgages with a short seller of foreclosure.
I -- you have to pay a load of taxes and that amount that's forgiven.
So how detrimental could this really be to our housing.
Joining us now let her take on -- -- tiny market president and founder at team investments.
Okay tiny let's first explain to people.
Howell short sell foreclosed buyers are taking advantage of this debt relief.
Won't -- congress.
Really needs to pass this what the 2007 debt forgiveness act does is it for give -- that debt.
For example if someone sells their house or if they -- -- 100000 dollars and they sell -- for 70000.
They are not taxed.
On that 30000 dollar income as ordinary income -- little example actually.
I wanna interrupt you -- we can put the full screen up of exactly what -- saying.
You low 150 a 150000 on the mortgage -- sell -- for 120 so that thirty grand is what you're talking about that right now is tax rate.
That's exactly right.
And so people can really get out of the housing that's that there in I've always said at your house should be -- safe haven it's not something that should.
Drive you bananas and cause dissension in your home.
If you're in a bad housing situation.
Get out now and make a better financial decision this is the tight if they don't extend that what will happen is you'll get taxed on that 30000 dollar.
The problem is most people -- W two workers.
And add 30000 dollars of income you have that W two worker is really going to be detrimental to the economy itself because you're not -- taxes on that I think you're at or as ordinary income you're absolutely correct and that -- so let's talk about this -- -- -- that many short sales happening that this is gonna make a difference.
There are still -- -- -- starts out and it -- apart letters and even though we're seeing.
Gains in the housing market and it's a great time to get into it and it you know laughter -- even better because prices were lower.
But it's still a great time to get in the housing market and get out of a bad situation if you're in a bad situation.
It is going to affect the housing market they need to extend this or really gonna see a drop in the gains that we've seen in what's going on -- having -- now.
-- -- -- -- -- This administration hasn't done anything perhaps in days had camp claimed blatant campaign -- and it's been ridiculous the entire time.
This is one thing that they -- did that help the homeowners let me.
We know that right now there is a proposal in president Obama's fiscal year 2013.
Budget to extend this for another two years.
Do you think that actually people -- are gonna rushed to try to get short sales done before December 31 in case it does not go through.
I think that they should very -- -- -- ECB can they do it because I know the process takes so long.
Actually -- you have a good person negotiating your short sale.
It doesn't take a long time -- -- Dotson -- it's just like buying -- -- need all the same paperwork to do your shorts fell to prove that you really need out of this underwater home.
Get it into your real search your attorney whoever is negotiating your strength and you'll be done by the end of the air moving along and Tony marking up thank you so much -- team investments thanks for your insights on.
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