Southern New Hampshire Real Estate and Short Sales: Will 2016 Be Your Last, Best, Chance For A Short Sale?

Will 2016 Be Your Last, Best, Chance For A Short Sale?

I received a frantic call, the other day, from a client I had recently helped with a Southern NH Short Sale.  It seems she had run into a real estate agent friend of a friend and the subject of her Short Sale came up.  The agent, no doubt in an effort to impress her with her knowledge about all things real estate, proceeded to warn her that she was most likely going to find herself with a "huge bill" because "some tax thing expired".

In all likelihood what this agent was referring to was the expiration of the Mortgage Forgiveness Debt Relief Act of 2007, originally signed into law by President Bush, which relieved homeowners from having to pay taxes on debt forgiven on the first mortgage on their primary residence.  The original Act was set to expire in 2009 but in 2008 it was extended through 2012.  It has been extended in one year increments since then.  2014 was a real nail biter since it was not extended until December 29, 2014, at which point the extension was retroactive.  2015 was also a nail biter since the Bills (there were two of them, one in the Senate and one in the House) introduced in Congress early in  the year languished in Committee.  Fortunately, another version was one of the tax break "extenders" that was quietly added into the 2016 Consolidated Appropriations Act which was passed by the House and the Senate and signed by the President in December.  As an added bonus, this time it was extended through the end of 2016. So, all of our nails will look much better this year.

Admittedly, since the real estate market is doing much better and Foreclosures and Short Sales are less frequent, this was certainly not front page news.  However, the folks who are still closely involved with Short Sales have not only been watching this but have been relatively certain that it would be extended all along.

Why the certainty?  Because the Making Home Affordable Program (the bone that the federal government threw Main Street America in the wake of the TARP bailout) is still in existence.  And, although the government has certainly been known to do some strange things, it is pretty unlikely (at least we all hope it's pretty unlikely) that they would promote a program which encourages distressed home owners to either modify their loan (which may include debt forgiveness) or short sell their home (which definitely includes debt forgiveness) and then whack them with a huge tax bill on the forgiven debt.

So, you ask, what does all of this have to do with 2016 possibly being the last, best chance for a Short Sale?  The Mortgage Forgiveness Debt Relief Act and The Making Home Affordable Program are now  both scheduled to expire at the end of 2016 and, absent another crisis, it seems unlikely that either will be extended.Will 2016 Be Your Last Best Chance For A Southern NH Short Sale

Therefore, if you are still underwater and have been struggling with your mortgage you may want to give some thought as to whether a Short Sale would be the best option for you.

If you do decide that a Short Sale is your best option, you might want to make sure that the agent you choose knows what that "tax thing" is (not that we are accountants, but really...).

If you have questions about Southern New Hampshire/Northern Massachusetts real estate, in general, or Short Sales, in particular, you can reach me at 603-490-5344.

Comment balloon 7 commentsJoy Baker • January 08 2016 08:31AM


It is nice that the Mortgage Debt Forgiveness Act was extended to include 2016.

Posted by Chris Ann Cleland, Associate Broker, Bristow, VA (Long and Foster REALTORS®, Gainesville, VA) about 5 years ago

I agree that it seems unlikely it will be extended beyond 2016. As for the well-intending yet low information agent speaking out of their backside ...

Posted by Kathleen Daniels, Probate & Trust Specialist, Probate Real Estate (KD Realty - 408.972.1822) about 5 years ago



Mr. Crappy feels Crap Talking agents need to learn to keep their trap closed if they do not know what they are talking about.

Posted by Kathleen Daniels, Probate & Trust Specialist, Probate Real Estate (KD Realty - 408.972.1822) about 5 years ago

Hi Kathleen~ Happy New Year!  Thanks for the comment and the feature!  Mr. Crappy holds a special place in my sarcastic heart!

Posted by Joy Baker, So NH RE & Short Sale Specialist (RE/MAX Insight) about 5 years ago

Buttinski...Brokers - love to get those calls from clients (past and current)...a guy at a cocktail party told me his ex-mother-in-law used to be a Realtor and she said "oh you can't do that any more it's against the law"...or was she a lawyer...can't remember??

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) about 5 years ago

Buttinski Brokers....LOVE THAT, Steve!


Posted by Joy Baker, So NH RE & Short Sale Specialist (RE/MAX Insight) about 5 years ago

Never say never. Prices are back to top again. I'm not sure how long their going to stay that high( i'm in los angeles hood). 

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Calabasas CA (Barcode Properties) over 4 years ago