Ecomomic Stimulus and Mortgage Forgiveness explored

Economic stimulus and REALTORS®:  The economic stimulus package enacted into law last week includes increases to conforming and FHA loan limits.  Find out what the new limits and other provisions mean to REALTORS®, and get a sense of how loan limits will rise in your markets based on preliminary National Association of REALTORS® estimates at a resource page on realtor.org.

Mortgage forgiveness tax relief instructions available:  The IRS has released a document (IR-2008-17) to educate taxpayers on complying with the mortgage cancellation tax relief provisions enacted at the end of last year.  Borrowers who had some portion of their mortgage debt forgiven in 2007 should receive a Form 1099C from the lender identifying the amount of forgiven debt.  Borrowers must also file a newly created form to report to the IRS that the debt relief was for a qualified mortgage.  The new form, Form 982, and its instructions are available online from the IRS.  The mortage relief provision applies to debt forgiven in 2007, no matter when the mortgage was entered into.  The most frequent circumstances in which debt is forgiven is on foreclosure, short sale, or a workout or reformation agreed to with the lender.