FHA reform reached an important milestone on Friday when the U.S. Senate overwhelmingly approved its version of the legislation, the bill passed by a vote of 93-1.
The new FHA reform will raise the limit on FHA loans from $362,000 to at least $417,000. Some areas of the country will see an increase go as high as $829,750. This FHA increase will help some 200,000 people countrywide who are facing foreclosure refinance under these new terms. But the biggest stumbling block to a compromise is a feature of the House bill which establishes a new housing trust fund for troubled borrowers and would require FHA to contribute to it. One can’t help to wonder if the increases are fair and just across the entire country. What happens to the people that live in God’s Country?
Also, the Senate passed a separate bill which would end, but only for three years, a provision in the tax code which has haunted so many homeowners after foreclosure or a loan workout. The Internal Revenue Service requires mortgage companies to send borrowers a 1099 for any loan amount written off by the lender after a foreclosure, short sale, or loan restructure. The IRS treats that forgiven debt as income and taxes the borrower accordingly.
Frank WibleREMAX ALL PROS
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