That is a good amount of potential debt to be forgiven. However, through the provision of Mortgage Debt Relief Act of 2007, homeowners are relieved from the burden of remitting taxes on their forgiven debt, whether this debt was forgiven through modification, foreclosure, or through a short sale. Unfortunately, this act will be expiring at the end of this year.

Lance Denha, Esq., from Law Offices of Lance Denha, asserts that this scheduled date of expiry for the mortgage debt relief act brings much uncertainty for a number of underwater homeowners who are on their way to a foreclosure.”

Individual borrower would realize thousands in savings if the expiry of this act is extended. For instance, depending on one’s tax bracket, for every $10,000 in forgiven debt could earn $1,500 to $3,500 in federal taxes. Similarly, when a mortgage debt of $100,000 is forgiven after a foreclosure, it could in turn incur $15,000 to $35,000 in taxes owed for the borrower.

However, notwithstanding the warning by the Law Office of Lance Denha that it will be a mistake to rush in handing over a deed before expiration date of December 31, the Congress could still end up extending the debt relief act.

According to Mark Luscombe, Obama included it in his budget to extend it up to 2014. In another statement, principal analyst for tax research firm CCH, said that the, “Congress… might decide it is not as critical as extending tax breaks that had already expired at the end of last year.”

Luscombe argues that this will not stop the congress from eventually acting to extend the relief. He goes ahead to say that, finding a way to pay is normally the only option about these things. The administration has proposed the extension of this act until January 1, 2015.

The condition for exclusion of forgiven debt from taxable income include the debt come from a primary residence, it must also be used for buying, building or for a substantial improvement of a primary residence. The other condition is that the debt must be an acquisition one of up to $2 million, or $1 million if the married taxpayers are filing separately.

The role of this multistate law firm, Law Office of Lance Denha, is to defend wrongful foreclosures against the homeowners.

Harris Interactive also discovered that about twenty-one percent of homeowners contemplate whether or not their mortgages are classified as being underwater. This term is utilized to designate homes that are so undervalued their mortgages are more than the amount they owe. As the economy continues to sink, a larger number of owners are starting to fall into this classification.

The poll reported that mortgages are decreasing. In Two thousand ten, sixty-nine percent of adults had mortgages; in two thousand eleven that figure fell to sixty-six percent. This shows two trends: individuals are not just losing their houses, but they are not purchasing anything new even though there are a larger number of inexpensive homes on the market.

Nonetheless, when it comes to people having troubles with their mortgage payments, there is a decrease between the figures acquired in two thousand eleven and the ones attained in two thousand ten.

Harris Interactive believes it is still too soon to decide whether there was real improvement. Foreclosure could be a chief reason that the statistics are declining.

Still, the stats do point to a rather slow recovery. The reason is they did match some other data from a study that was collected from Harris Interactive.

Just in terms of numbers, three thousand one hundred and seventy-one adults were polled in this latest study concerning mortgage payments. The poll happened in March of two thousand eleven, and it lasted seven days. All of the respondents took part of their own volition therefore; researchers did not compute the probability of error. No payment or other inducements were given, further solidifying the honesty of the information.

THIS UNIQUE TOWNHOUSE HAS LOTS OF POTENTIAL WITH  A SWISS CHALET FEEL. ONE OF THE 4 BEDROOMS IS USED AS AN OFFICE. LOFT HAS BEEN PARTIALLY ENCLOSED FOR USE AS MASTER SITTING ROOM AND ADDITIONAL OFFICE, PLUS WALKIN CLOSET. LARGE FENCED YARD WITH BUILT IN POOL, COVERED PORCH, ETC. OWNER ADMITS TO LOTS OF UNFINISHED PROJECTS. WASHER AND DRYER NOT INCLUDED. SHORT SALE IS WELL UNDER WAY. HOA FEES ARE ONLY $81 PER QUARTER.

THIS IS A SHORT SALE AND SUBJECT TO THE LENDER APPROVAL OF THE SHORT SALE.  TOP NOTCH NEGOTIATOR HANDLING THIS WITH THE BANK.

1713 SQUARE FOOTAGE UNDER AIR IS APPROXIMATE AND MAY NOT INCLUDE THE CONVERTED GARAGE. GOOD CONDITION. DOESN’T NEED A LOT OF WORK.  SHED IN BACKYARD DOES NOT STAY.

The research by Harris Interactive further reveals that around 21% of householders are completely unaware of the status of their mortgages regarding underwater category; a financial term that best describes under valued collaterals not being able to cover their indebted sum of loan. With a shrinking economy and a shrinking middle class who forms the majority of lenders, it is apparent why the number is increasing so fast in terms of households categorized under the underwater category.

Another important fact highlighted by the poll is the noticeable downslide in mortgages. Comparing the year 2010 to 2011, adult mortgages declined from 69% to 66%, a certain 3% reduction in percentage within the span of a single year signified couple of substantial facts. One is that despite the prices of real estate not in its majestic boom, prospective homeowners are rather reluctant to buy a house. The second and more apparent fact is since people are toiling to get off their debt, they are not encouraged to invest in new homes.

Amidst such berserk prospects, lenders can breathe a sigh of relief considering the fact that there was a downfall in number of individuals who were going through acute difficulty settling their mortgage installments in 2011, compared to the figures in 2010. However, Harris Interactive have their share of doubts over this substantial progress and have instead credited foreclosure behind such impressive stats.

Still, if the numbers above are considered fair, it cannot be asserted as a normal recovery if compared with industry standards. Harris Interactive compared these numbers with the collected data from another study and came to a conclusion that the growth is undoubtedly slow.

All the above facts were collected from an extensive research conducted on March, 2011. The research lasted for a week involving 3171 adults who were interviewed on the subject of mortgage payments. Since all the participants took part in the research at their own will, no provision was made for any possible sampling errors. The poll was conducted with an objective and impartial approach, which made the results unerringly definite.

You will leave with a full understanding of the options available to home owners who are “upside down” or facing foreclosures.

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How can you search for the right mortgage lender?

In this tough competitive market, you will find several mortgage lenders offering you the same type of mortgage loan. But, you must know that all mortgage lenders are not genuine and so, you should research thoroughly before you decide to choose one. You may take the help of Internet and gather sufficient information about them or enquire from your friends and relatives who have at least some knowledge in this matter. Purchasing your own home is a one time commitment that every individual makes and so, you should take sufficient time before you choose a lender to take out mortgage loans.

Why is it important to read the clauses properly before taking you a mortgage loan?

Before taking out a mortgage loan, it is very important that you go through the clauses properly. This is because many times it has been seen that a borrower takes out a mortgage loan in a hurry without reading the terms and conditions thoroughly and has to repent later since he is unaware that the lender has imposed heavy hidden charges on the mortgage loan. In this situation, a borrower has nothing to do but rather accept the extra charge that has already been imposed upon him by the lender.

What role does credit score play in case of mortgage loans?

Credit score plays a vital role when you want to take out a mortgage loan. You need to be aware that a mortgage lender will assess your credit score at first before he thinks of approving your loan request. As such, it is important that you have a good credit score before you approach your lender for loan approval. With good credit score, the lender feels that you are a responsible borrower and you know how to handle finances efficiently. Thus, you will get your loan approval at low interest rate and the lender believes that you will repay the loan amount on time. But, with bad credit score, the lender feels that you are a risky borrower and, as such, he will not agree to approve your loan request. However, there are some mortgage lenders who may agree to approve your loan request even when you have bad credit score on condition that you will have to pay high interest rate on the loan amount. Thus, it is advisable that you check your credit score properly before you take out a mortgage loan.

Thus, it is seen that by taking out a suitable mortgage loan, you will be able to get the needed money to buy your dream house.

- Contributed by MortgageFit Community member