Legislation Will Incentivize Short-Sales of Homes As an Alternative to Home Foreclosure
Washington, DC – March 12, 2010 – (RealEstateRama) — Yesterday, Congressman Bill Foster (IL-14) introduced legislation that will promote neighborhood stabilization by incentivizing short sales as a preferable alternative to foreclosure.
“The rapid decline in housing prices has left many homeowners in a situation where they owe more on their home than it is worth. Being underwater on your mortgage makes it far more likely that the bank will begin the foreclosure process,” said Foster. “We have seen that home foreclosures have had significant negative impacts on surrounding homes, decreasing property values and destabilizing neighborhoods. By offering a tax deduction, my legislation will incentivize and reduce the economic damage when people choose the less destructive option of short selling over foreclosure. Reducing the number of foreclosures will promote neighborhood stabilization minimize the damage when people are unable to keep their homes.”
H.R. 4826, the Responsible Homeowner Relief Act, will allow qualifying homeowners who have lived in their homes for at least two consecutive years to deduct up to $9,000 of the loss from a short sale over a three year period.
“This legislation is a commonsense solution that encourages homeowners to pursue a course of action that minimizes the damage to neighborhoods if their home values plummet,” said Foster. “By choosing short selling over foreclosure, homeowners and banks can work together to help stabilize housing prices, which play a crucial role in overall economic stability.”