Make a "New" New Year's Resolution to Get Out of Your Underwater Home!

Mortgage Forgiveness Debt Relief Act tax breaks set to end in 2012

Sicklerville NJ: We all begin our New Year with Resolutions and most of them are the same. Spend more time with family, make more money,quit smoking, quit drinking, lose weight. In 2012, the resolution of choice for many will be... Get out of debt. For so many homeowners, it's time to start thinking about how underwater they may be in their homes .

With more home foreclosures looming homes will be competing with each other for the available limted buyers and the upcoming expiration of the Mortgage Forgiveness Debt Relief Act, homeowners need to ask themselves... Do I continue to pay my mortgage when I'm so far upside down, or can I even afford to continue paying my mortgage?

One of the greatest solutions to underwater homeowners has been the Mortgage Forgiveness Debt Relief Act that allows many to avoid large tax liabilities tied to their short sale and foreclosure transactions as published in marketwatch.com.

If you owe a debt to someone and that debt is forgiven, the amount they forgive can be taxed, Right now, many borrowers are able to avoid tax liabilities resulting from the debt cancellation, but when the debt relief act expires in 2012 and even if the bank releases you of your deficiancy, a huge tax burden will exist if your home is sold after 2012.

According to Zillow, home values in last 5 years have dropped

• • • • • Gloucester Twp NJ have dropped -25%
        • Washington Twp NJ have dropped -26%
        • Blackwood NJ have dropped -24%
        • Pine Hill NJ have dropped -31%
        • Cherry Hill NJ have dropped -27%
        • Mullica Hill NJ have dropped -27%
        • Marlton NJ have dropped -24%

With little hope of rebounding in the near future and the expiration of the debt relief act, the time to act is now. Short sales can take some time to complete, (3-6 months) so to beat the deadline, homeowners need to start the process by April, if not sooner.