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If you did a loan modification, short sale or had a foreclosure in California last year than you were probably one of the many that were afraid to file your 2009 state taxes. Up until April 12, 2010 the Mortgage Relief Act had not been extended after 2009. Most people were expecting to not have to worry about paying any taxes for their deficit. A loan modification is when the terms of a loan are changed. Many people try this option first when they begin to realize that they may not be able to afford their mortgage payment soon. You contact the lender and discuss restructuring your loan to better suit your budget constraints. This may mean a lower interest rate or extending the length of the loan. A short sale is when you can no longer afford your home and your bank is willing to accept less than the balance you owe on your home loan. Usually, you need to show the lending institution that you are financially strained. They will probably send you a packet of paperwork that will need to be completed. This is better than going through the process of a foreclosure. A foreclosure is when you are no longer making payments on your home for a reason. The creditor will send many notifications to communicate with you to make other arrangements. After a certain amount of time has passed without payment the creditor will proceed with taking back the property through the courts. By the date of the announcement an unknown number of people had already filed their taxes. Those people may need to file an amended state tax return. When you make the necessary changes you must remember to write "Mortgage Debt Relief" in red at the top of the form. If you waited until the last minute to file your taxes because you knew that the state had not extended the Mortgage Forgiveness Debt Relief Act than you were probably ecstatic when you realized that, low and behold, California decided to extend the act through 2012. At midnight on April 12, 2010 the announcement was made that people who had a loss that was forgiven would not have to pay any taxes on that amount.
Are you in search for the mortgage relief act in your state? Well, try our information that can help you be on your way to getting help fast. Http://nphsrealestate.org/california-passes-mortgageforgiveness-debt-relief-act/
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