And The Coming Collapse of Real Estate in Florida

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While most of America is lost in delusion and while some residents of Pinellas County, Florida are just starting to come to grips with the Flood Insurance catastrophe that has decimated real estate values in the thumb sticking out directly into the Gulf of Mexico that is Pinellas County, it’s time to talk about the next horseman of the coming Florida real estate apocalypse…..our old nemesis the Mortgage Debt Relief Act of 2007.  Every year it’s the same old thing….lots of debate about whether Congress will extend the portions of a tax code that allow a homeowner to escape crippling liability when the sell their homestead property in a short sale.  And every year up until this year, I was very confident that the tax exemption would be extended yet another year.

But as everyone with their fingers on the weak pulse of this nation’s politics knows…this year is very much different.  October is historically a very dangerous and chaotic year for the nation’s financial markets and economy.  And this October is uglier than most.  Every year this nation’s financial problems get worse and every year it sure seems like we’ve passed the point of no return where there is no real solution.  Well, this year, it certainly seems like the country is running straight into a brick wall.  Which brings us back to a real big problem on the horizon….the likelihood that the Act will not be extended past January 2014.

So what should consumers do?  Be careful, and act quickly  If you have any intentions of selling….sell right away…get it closed before 2014 rolls around….

What are the chances of an extension passing?  Not at all encouraging.

From GovTrac:

6/19/2013–Introduced.
Mortgage Foregiveness Tax Relief Act – Amends the Internal Revenue Code to extend through 2015 the exclusion from gross income of income attributable to the discharge of indebtedness on a principal residence.
Prognosis
1% chance of getting past committee.
0% chance of being enacted.

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Matt Weidner

About Matt Weidner

Matt Weidner has written 304 post in this blog.