Bloomberg Features BCC in “Short Sales of Homes Surge as Tax Break to Expire: Mortgages.”

Thursday, December 6, 2012

Boston Community Capital’s SUN Initiative was featured in the Bloomberg article, “Short Sales of Homes Surge as Tax Break to Expire: Mortgages.”  The article, written by Kathleen Howley, explains the consequences that the tax breaks, which are set to expire at the end of the year, will have on homeowners if they are not extended.  Howley explains:

“Short sales have accounted for as many as 1.1 million transactions since 2009, helping to reduce the inventory of homes owned by banks that can blight neighborhoods and flood the market. Barring a last-minute extension of the 2007 Mortgage Forgiveness Debt Relief Act, homeowners will be taxed on the forgiven principal. With Congress focused on the so-called fiscal cliff, federal spending cuts and tax-rate hikes set to kick in on Jan. 1, the law may not be extended, leading to a drop in short sales and a rise in foreclosures.”

While people have heard of the “fiscal cliff” many do not realize the impact it will have on homeowners currently negotiating a principal reduction.  BCC CEO, Elyse Cherry, explains:

“If the tax break isn’t extended, it’s going to come as a surprise to many homeowners currently negotiating a principal reduction with their lenders, said Elyse Cherry, CEO of Boston Community Capital, which provides foreclosure prevention aid in Boston.”

‘“If you ask 10 people in foreclosure, most of them wouldn’t know they may have a deadline,” Cherry said. “They know about the fiscal cliff, but they don’t know they might be facing their own cliff.’”