CA Senate Bill 401

Distressed homeowners no longer have to pay California state income tax on debt forgiven in a short sale, foreclosure, or loan modification.  Enacted into law a couple of days ago, Senate Bill 401 generally aligns California’s tax treatment of mortgage debt relief income with federal law.  For debt forgiven on a loan secured by a “qualified principal residence,” borrowers will now be exempt from both federal and state income tax consequences.  The existing federal exemption is for indebtedness up to $2 million, whereas the new … Read More

HAFA – Just Another Four-letter Word?

What is HAFA?The number one question we are asked right now is about the HAFA program (Home Affordable Foreclosures Alternatives) – which went into effect on April 5th – and how it is going to affect short sales. So here is my quick summary:

First some background: in 2009 the Treasury Department came up with the HAMP program (Home Affordable Modification Program), which, if you read the news, has not been very effective. And since these loan modifications haven’t been too successful, the government decided to come … Read More