http://www.latimes.com/business/realestate/la-fi-foreclosure-aid-20110708,0,1640816.story
In another example of incentivizing bad choices, the Obama administration is telling loam processors of FHA insured loans to not begin foreclosure for 12 months if the homeowner is unemployed.
It’s up to you to decide if this is stupidity or deliberate destruction. When the mortgage defaults in a year, you and I pick up the tab for any deficiency. Maybe FHA should require everyone to carry universal mortgage insurance.
Define “unemployed”. I could claim that I’m unemployed whenever a client is late paying my invoices. But of course I don’t.
So is the IRS going to tax these folks for the “imputed income” of occupying a home with no mortgage or rent payments?
It used to be that the defiency of a foreclosed mortgage or a short sale was taxable to the seller, but Congress – in their infinite compassion for the moochers – changed that. In theory, many of those people have no money – but there are people “playing the system” to dilberately remove all value from the house and run up the biggest mortgage they can – and they aren’t broke.