Distressed homeowners who used the equity in their homes to finance debt consolidation or vacations will still face a tax penalty if a lender reduces their mortgage debt under the recently enacted Mortgage Forgiveness Debt Relief Act.Only the forgiveness of mortgage debt used to finance the acquisition of a borrower's primary residence and improvements to the property will escape being treated as ordinary income for tax purposes, according to a mortgage banking alert by two tax attorneys at K&L Gates. Attorneys Kenneth Wear and Roger Wise also point out that only borrowers who have lived in their homes for at least two years can qualify for tax relief. This provision weeds out speculators but it also denies relief for new homeowners who got in over their heads and defaulted early. Meanwhile, the tax relief measure "places no additional burden on lenders," the tax attorneys say. The borrowers have to determine whether they qualify for relief. Lenders simply provide borrowers with Internal Revenue Service Form 1099-C (Cancellation of Debt).
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The massive mortgage business saw a first quarter profit mitigated by nearly $300 million in hedging losses.
April 24 -
The Consumer Financial Protection Bureau has seen excessive property-inspection charges, fees that loan mods should eliminate and improper line-item labels.
April 24 -
Michael Tannenbaum, whose experience in the financial services industry spans over 15 years, has a track record of helping companies scale and grow.
April 24 -
A majority of consumers earning more than $100,000 annually said they were concerned about their own ability to purchase a home, demonstrating how affordability issues are impacting those at many socioeconomic levels, the University of Michigan study found.
April 24 -
The nonbank's results add to other indications that the first quarter's "higher for longer" rate scenario had an upside for efficient servicing operations.
April 24 -
The latest rate increases contributed to a 1% drop in purchases from the previous week and 15% annually, according to the Mortgage Bankers Association.
April 24