FHA reform reached an important milestone on Friday when the U.S. Senate overwhelmingly approved its version of the legislation, the bill passed by a vote of 93-1.
The new FHA reform will raise the limit on FHA loans from $362,000 to at least $417,000. Some areas of the country will see an increase go as high as $829,750. This FHA increase will help some 200,000 people countrywide who are facing foreclosure refinance under these new terms. But the biggest stumbling block to a compromise is a feature of the House bill which establishes a new housing trust fund for troubled borrowers and would require FHA to contribute to it.
Also, the Senate passed a separate bill which would end, but only for three years, a provision in the tax code which has haunted so many homeowners after foreclosure or a loan workout. The Internal Revenue Service requires mortgage companies to send borrowers a 1099 for any loan amount written off by the lender after a foreclosure, short sale, or loan restructure. The IRS treats that forgiven debt as income and taxes the borrower accordingly.
Frank Wible
REMAX ALL PROS
fwible@remax.net
http://www.shortsalenj.com/
