I have had a mortgage application pending for 3 months. Normally when a transaction doesn’t move forward, it is usually the note holder or the servicer not agreeing to accept the dollars they would be receiving.
In this case the actual seller backed out of the transaction because of the possible tax consequence. Since the Debt Relief Act expired 12/31/13 and there is no guarantee that it will be extended, the sellers felt they couldn’t take that chance.
This is the second time this week that this issue has shown up. Depending if the act will be extended, many sellers will rethink their willingness to do a short sale and will perpetuate more foreclosures in the future. This is a really bad move on Washington’s part.
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All of us in the real estate and mortgage business need to communicate with their elected officials to move forward on extending the Debt Relief Act.
