“Attached is a story from the Chicago Tribune that you should know about and discuss with / forward to all the agents in your office.
Currently, the Mortgage Forgiveness Debt Relief Act of 2007 allows homeowners to exclude the amount of the loan forgiven in short sales and foreclosures. This means that, following a short sale or foreclosure, homeowners do not get a big income tax bill at the end of the year for foregiveness of debt income on top of losing their homes. However, there is uncertainty about whether or not the Act will be extended beyond this year. Please see the Tribune article that goes into more detail:
I would encourage homeowners to carefully consider the implications of holding on to their homes instead of immediately short selling if this option is right for them and they would otherwise qualify.”