MORTGAGE CRISIS LOOMS ON THE HORIZON……THE TAX BREAK LOOKS LIKE IT WILL EXPIRE…..FISCAL GRAND CANYON FOR HOMEOWNERS….

The race is on to finalize short sales and seal the deal on mortgage reductions as the Dec. 31 expiration of a massive tax break for struggling Florida homeowners looms.
Since 2007, homeowners whose banks have forgiven unpaid mortgage debt after a short sale, principal reduction or foreclosure have not been required to count that money as income on their tax returns.
But the sunset of the federal Mortgage Forgiveness Debt Relief Act means borrowers, who have been spared tens of thousands of dollars depending on the amount forgiven and their tax bracket, may be faced with whopping IRS bills after losing their home.
Florida Attorney General Pam Bondi is leading a group of attorneys general from around the country in lobbying for an extension of the act. In a Nov. 20 letter to lawmakers, Bondi and Connecticut Attorney General George Jepsen said allowing the tax break to expire would dilute the $25 billion mortgage settlement made with the nation’s five largest banks in March. The settlement has already provided for $386.7 million in primary mortgage principal forgiveness for Florida homeowners. Another $2.2 billion statewide has been forgiven through short sales.
PALM BEACH POST