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Mortgage Forgiveness Debt Relief Act set to expire

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    Bob Massi explains what you need to know

  • Duration 3:45
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We want to tell you about something called the mortgage forgiveness debt relief.

Act that's a mouthful but I tell you what this bill.

Has been helping homeowners all across the country since it was signed by President Bush back in 2007.

But now under new leadership in Washington.

The tools he provides.

Mike -- trash Fox News legal analyst Bob Massi joins us right now from Vegas -- more and -- -- state.

First of all this -- I'm sure there are a lot of people out there who don't know with the mortgage forgiveness debt relief act is to tell.

-- -- -- Law that was passed in those seven said that if your house was foreclosed on -- sure -- sold and you voted deficiency.

Between what was owed and what it what it was sold four -- -- the for closure price was.

That difference if it's forgiven by the lender in other words -- lender says you don't -- -- that money anymore.

Under the mortgage relief act it was a primary residence it was the original mortgage and you occupy -- home you would not have to pay eight tax on that.

Part of that loss Steve if there was a 200000 dollar difference.

What was -- what the value was and they gave get 1099.

Right you'd have to pay tax income tax on it.

That's why this is an important law so -- all the people who were working on their taxes right now just imagine -- get the benefit of that so who who is it's helped in the past.

While those people who have lost their homes by way of foreclosure primary residences stated.

Those people that short sold their homes.

They would receive Steve generally speaking from a lender what's called a 1099.

C which means cancellation of -- And they're CPA or -- look at it say okay.

It was a primary residence you live than it was the original mortgage the lender has forgiven it.

Therefore you're -- -- you do not have to pay a tax on that difference that was forgiven.

All right but you got -- you know you might think it happened but unless you get that 1099 C.

The government done ads in crucial part okay that's right because what happens is the Lander sends it to the IRS and -- homeowner and here's the key.

This law expires this year.

And I plead with our viewers if -- if they've ever listen to anything that I've said over the last few years it's incumbent upon you.

To call your representatives.

United States senators and congress persons in congress to plead with them to extend.

The 2007.

Mortgage relief act if they don't Steve.

Chaos that what happened of people in America will be that that different stats forgiven they will have to pay income tax on that.

Bankruptcies will go to the roof even more short sales become impossible it could be devastating to American homeowners so police.

Push to extend it.

Well you gotta figure five years ago when they came up with this during the Bush Administration they probably OK where were really in a hole right now and we work.

But -- -- from now we're gonna be better.

That's not the case in fact the housing market continued to go south and that's why now you say.

Call your congressman call your senators say extend it for at least a couple more years.

Absolutely even if they extended two years to see how this market goes Steve I just -- -- our viewers.

This is one of those things that you must become proactive -- and so should realtors.

-- -- this is an extended spring realtors are gonna have major problems selling homes are short sells and in this country.

All good stuff we need to know about thank you Robert by the way if you got a question for Bob just -- to our website FOX & Friends dot com.

Can figure out how to get in touch with him he might answer your question live on TV from -- -- -- --

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