After suffering for years during the recession and housing crisis, there may finally be a way for homeowners facing foreclosure to get some much-needed -- and long-awaited -- help for their underwater homes. Florida is one of the states suffering the worst of the national housing market crash, and mortgage giants Fannie Mae and Freddie Mac are now offering some solutions to help many of the millions of struggling homeowners in the U.S.
The Mortgage Forgiveness Debt Relief Act has been extended through December 31, 2013. The Act was set to expire December 31, 2012. By extending the Act, homeowners who are granted principal forgiveness of their loan, due to a short sale, a deed in lieu of foreclosure, or who have lost their principal home to foreclosure, will not be taxed on the amount forgiven up to $2 million dollars. Short sales are popular since they have a smaller impact of a borrower's credit and they allow a borrower to buy a home again sooner than if they were foreclosed upon. Banks like short sales because they are less expensive than foreclosures.