The current Mortgage Debt Relief Act of 2007 is set to expire on December 31 of this year. While there is a bill in the House that would extend it to 2015, homeowners are getting twitchy. So much so, in fact, that according to YouWalkAway.com, a foreclosure prevention agency, conducted a survey of borrowers and found that over 1/3 of all respondents cited the impending expiration as a major factor in their decision to walk away from their mortgages and homes through strategic default.
The Mortgage Debt Relief Act “releases homeowners from their obligation of paying taxes on mortgage debt forgiven from a short sale, foreclosure or modification.” YouWalkAway saw a surge last year of homeowners trying to settle their foreclosure crisis before the expiration of the Act, but for those who won’t get through the process in time, they would walk away. The kicker is, 75% of those who said they would walk away would qualify for relief under the Act.
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