While most of the nation was ringing in 2014 as the Swarovski crystal ball dropped in Times Square, the American government was busy eliminating a raft of tax breaks as part of their usual year-end house cleaning. While this doesn’t come as much of a surprise, the vanishing act of these tax breaks typically goes unnoticed until the last minute, sparking a lobbying craze across Washington.
Kevin Stein, associate director of the California Reinvestment Coalition, told The Los Angeles Times, “It’s a hit on people who are meant to be helped, and it is a big deal and it would be very unfortunate if, due to Congress’ inability to act, people will suffer.”
Those who put less than 20% down on a house have to pay Private Mortgage Insurance (PMI), a policy provided by private mortgage insurers to protect lenders against loss if a borrower defaults premiums. This has affected a large number of borrowers. As one of the so-called “temporary” tax breaks created during the onset of the financial crisis, being able to deduct that insurance premium saves an individual (on average) around 25 percent off their federal income tax return. Those who engage in a short sale could see themselves having to pay thousands of dollars in additional fees now that this break is gone.
If this tax break is not reinstated, it could condemn those consumers to a permanent class of renters, and it will weigh in on a still fragile housing recovery for many markets. Basically, those which need help the most will be the most impacted.
A short sale is clearly a more favorable option than a foreclosure and with millions of individuals still underwater as a result of their mortgages, slamming folks with additional taxation and fees seems absurd. We’re only just starting to gain ground on the economic and housing crisis, so what possible reason could the government have for letting this tax break expire? Forty-two Attorneys General from across the United States sent letters to Congress asking that the tax break be extended, however; their pleas apparently fell upon deaf ears.
These tax breaks affect the people that need it the most in this country, the lower- and middle-class Americans. Not helping where it is needed will only force more people into foreclosure and bankruptcy and will once again cause a downturn in the economy. They hit Chase with billions in fines, not sure why don’t they take all that money and help taxpayers out with tax breaks.
There’s pending legislation in the House and Senate currently, there’s no guaranty that the tax break could be extended. The pending legislation would see the break extended into 2015.
The unfortunate side effect of the federal government having addressed the recent housing debacle in a piecemeal fashion is that critical aspects of the policy toolbox can slip through the cracks. Without a retroactive extension of the debt forgiveness provision, much of the homeowner relief program will be in shambles. What homeowner, with a mortgage underwater, will seek principal forgiveness if it triggers an enormous tax liability? There may be a reasonable debate as to whether more relief is needed, but it defies common sense to have the federal government push lenders to write down debt owed by homeowners who have no ability to repay and on the other hand ignore the most important provision standing in the way of homeowners.
Those who put less than 20% down on a house have to pay Private Mortgage Insurance (PMI), a policy provided by private mortgage insurers to protect lenders against loss if a borrower defaults premiums. This has affected a large number of borrowers. As one of the so-called “temporary” tax breaks created during the onset of the financial crisis, being able to deduct that insurance premium saves an individual (on average) around 25 percent off their federal income tax return. Those who engage in a short sale could see themselves having to pay thousands of dollars in additional fees now that this break is gone.
If this tax break is not reinstated, it could condemn those consumers to a permanent class of renters, and it will weigh in on a still fragile housing recovery for many markets. Basically, those which need help the most will be the most impacted.
A short sale is clearly a more favorable option than a foreclosure and with millions of individuals still underwater as a result of their mortgages, slamming folks with additional taxation and fees seems absurd. We’re only just starting to gain ground on the economic and housing crisis, so what possible reason could the government have for letting this tax break expire? Forty-two Attorneys General from across the United States sent letters to Congress asking that the tax break be extended, however; their pleas apparently fell upon deaf ears.
These tax breaks affect the people that need it the most in this country, the lower- and middle-class Americans. Not helping where it is needed will only force more people into foreclosure and bankruptcy and will once again cause a downturn in the economy. They hit Chase with billions in fines, not sure why don’t they take all that money and help taxpayers out with tax breaks.
There’s pending legislation in the House and Senate currently, there’s no guaranty that the tax break could be extended. The pending legislation would see the break extended into 2015.
The unfortunate side effect of the federal government having addressed the recent housing debacle in a piecemeal fashion is that critical aspects of the policy toolbox can slip through the cracks. Without a retroactive extension of the debt forgiveness provision, much of the homeowner relief program will be in shambles. What homeowner, with a mortgage underwater, will seek principal forgiveness if it triggers an enormous tax liability? There may be a reasonable debate as to whether more relief is needed, but it defies common sense to have the federal government push lenders to write down debt owed by homeowners who have no ability to repay and on the other hand ignore the most important provision standing in the way of homeowners.
So any questions, you can contact me directly:
Patty Ross
831-236-4513
pattyre@comcast.net
www.pattyrosscarmel.com
325 PRESCOTT LANE, Pacific Grove 93950
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Class:
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Single Family Residential
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List Date:
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01/06/2014
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Beds:
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3
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List Price:
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$679,000
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Baths:
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2 (2/0)
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Sale Price:
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SqFt:
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1,332 (Assessor)
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HOA Fee:
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Lot Size:
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6,850 Sqft (Assessor)
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X-street:
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Forest
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Elem Dist:
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Pacific Grove Unified
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High Dist:
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Pacific Grove Unified
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List Office:
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Sotheby's Int'l Realty-Rancho
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Remarks:
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New on the market. Beautiful home completely remodeled. New
plumbing, electrical, hardwood, granite, tile, windows, stone, etc. Too much
to list. R4 zoning. This home is currently residential but the possibilities
are endless. Run your shop or business from this home or as water is
available, add up to 3 units. All this & being in the Pacific Grove
school district.
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214 9TH STREET, Pacific Grove 93950
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Class:
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Single Family Residential
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List Date:
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01/17/2014
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Beds:
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4
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List Price:
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$995,000
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Baths:
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2 (2/0)
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Sale Price:
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SqFt:
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1,221 (Assessor)
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HOA Fee:
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Lot Size:
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3,000 Sqft (Assessor)
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X-street:
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Laurel
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Elem Dist:
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Pacific Grove Unified
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High Dist:
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Pacific Grove Unified
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List Office:
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Sotheby's Int'l Realty-Rancho
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Direction:
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Take Pine St towards Monterey. Turn left on 9th St. Go towards
ocean for 2 blocks.
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Remarks:
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Charming & FLEXIBLE! Victorian restored from the ground up
in 2004. Just professionally painted inside and out making it SPARKLE &
ready to move into. The lower level has 1/1 & a large living room, making
it the perfect in-law unit or extension to the 1st floor. The main level has
3/2 & a neat loft space. Steps to the ocean. Walk to downtown. PERFECT!
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