Special provisions of the tax law can often reduce or eliminate the tax burden of borrowers who have lost their homes. The IRS' Q&A page includes a variety of information, including a worksheet designed to help borrowers determine whether any of the foreclosure-related relief provisions apply to them. For taxpayers who owe additional tax, it also includes a form they can use to request a payment agreement with the IRS. Some taxpayers may qualify for an "offer-in-compromise," allowing the taxpayer to settle their debt with the IRS for less than the full amount owed.
Earlier this month, the Federal Housing Administration (FHA) announced new lending policies designed to help up to 240,000 holders of subprime home loans avoid foreclosure.
Also See:
FHA Acts to Rescue Defaulted Subprime Borrowers
Fed Subprime Bailout - Why, How and Will It Cost Me? (US Economy)
Comments
Just read your interesting article on foreclosures and it is certainly a dynamic market right now. For any of the readers, if you are interested to find out what is going on in the California distressed property market, you can get a detailed analysis of foreclose-related properties and of the market trends in the various counties in California. Existing homes for sale inventory rose in 10 out of the 13 California counties we covered. There are more distressed properties in the market in 11 counties out of these 13 counties. Contra Costa County has the highest proportion (25%) of their listed properties related to distressed properties. You can find the report at:
California Real Estate Market Report
Henry
I’m just hoping this doesn’t turn into some kind of tax forgiveness that ends up costing the rest of us taxpayers a ton of money!
It’s time to start living WITHIN your means, people, instead of living outside of them.
If they wouldn’t have purchased the huge “McMansions” to show their status, maybe they wouldn’t be in the trouble they are finding themselves in.
I say make them PAY…they all got themselves into this mess…let them figure out how to get themselves OUT!!!
Not all of us who have faced foreclosure lived “outside out means”! I had a great job and was recognized as a valued employee. I worked hard and was compensated for that hard work. But, when the economy started to crash, the industry I was in went through major changes and as a result, our jobs were cut, the company eventually was acquired, and life as we’d known it was over…So, from someone who met my financial obligations, never late on anything, had perfect credit, had a substantial retirement program, etc., I do not feel I am at fault. For you to generalize the thousands of people who have faced foreclosure into one lump saying everyone had “McMansions” and lived beyond our means simply shows you are uninformed and do not understand the state of our economy. Become educated because your statements scream ’stupidity’ to me!
The whole offer in compromise is not as simple as we are lead to believe. Take it form someone who has gone through some challenges with the IRS they will get their money and do not believe the commercials for the companies who say they can get you a settlement. It is easier to deal directly with the IRS.