Los Angeles foreclosures could increase with the expiration of a tax deduction that had been extended to homeowners to write off their mortgage insurance premiums.
Our Los Angeles foreclosure attorneys understand that the loss of this write-off is going to impact millions of homeowners‚ who had counted on it since it was enacted in 2006.
It seems nearly every time we turn around‚ there is some other negative impact to homeowners‚ many of whom are struggling in a lagging economy‚ working to claw their way out of debt and hang onto their homes.
The measure expired‚ along with nearly 60 other tax code benefits that Congress decided not to renew. These include credits for houses that meet certain standards of energy efficiency and credits for local and state sales tax payments. Each of these were part of what would have been a yearly “tax extenders” bill that would have approved the continuance of benefits for homeowners for another year or more. These measures were all pretty non-controversial‚ and were of at least some assistance to homeowners‚ so it’s disappointing that it wasn’t passed. The Los Angeles Times reports there is a chance that legislators could take retroactive action to pass it‚ but that doesn’t seem likely‚ given the heated debates taking place on other topics.
The mortgage insurance tax deduction is going to hit hardest those with conventional loans that were low down payment – mostly those having been signed since 2007‚ as well as all loans approved this year where the down payment was under 20 percent. Individuals who were using rural housing and guaranteed veterans loans – whose down payments are sometimes as low as zero – are additionally going to be negatively impacted.
The deduction had allowed refinancers and buyers who used federal guarantees or private or federal insurance‚ and who itemized their federal tax returns‚ to write off their insurance premiums. Those who were married and filing jointly or single and had a yearly gross income of $100‚000 or less could write off all of their yearly mortgage insurance payments. Homeowners who were married and filing separately could have up to 50 percent off of their mortgage insurance payments. And anyone who had a salary over $100‚000 could get deductions that fell on a sliding scale.
Our Los Angeles foreclosure attorneys understand that for many individuals‚ these savings were significant. The newspaper figured that for a new couple who had an income of roughly $100‚000 and a mortgage payment of roughly $200‚000 could expect a savings of about $1‚000 annually. That may not seem like much‚ but if that couple secured the loan in 2007‚ and one-half lost his or her job in the interim‚ the loss of that deduction is going to be felt‚ and could be yet another factor in increasing debt and the possibility of bankruptcy and foreclosure.
There are ways individuals can work to fight foreclosure and manage debt‚ but it’s imperative that you meet with a skilled attorney‚ who can offer you a detailed analysis of your unique situation and the options you have before you.
Cal West Law will provide a free consultation to help guide you in making a decision that works for you. In Encino‚ Glendale‚ and Los Angeles‚ just call (800) 568-0707.