Another provision is protection from tax liability for underwater homeowners in the case of a short sale or if their lender reduces the principal of their loan.
Chicago, IL (PRWEB) April 06, 2014
The Federal Savings Bank is intrigued by a new measure that has emerged to help homeowners, and is currently under review by the U.S. Senate Committee on Finance. The legislation is called the Expiring Provisions Improvement Reform and Efficiency Act - also known as the EXPIRE act - which could lower tax obligations and extend tax benefits for many homeowners.
The MBA supports EXPIRE
The committee began review on April 3, and the Mortgage Bankers Association (MBA) has openly stated its support of the act. William Killmer, senior vice president of legislative and political affairs with the MBA, sent a letter to Committee Chairman Ron Wyden, D-Ore., and ranking member Orrin Hatch, R-Utah, detailing the reasons why EXPIRE is a necessity for both homeowners and the housing market overall.
The Federal Savings Bank highlights three provisions interest in the act which seems integral to the nation's continued economic recovery:
The mortgage insurance tax deduction would be extended for premiums paid by homeowners. Many first-time home buyers are required to pay for such insurance, as most new borrowers cannot supply a 20 percent down payment. This provision would benefit these buyers, allowing them to save $600 to $1,000 each year for a $200,000 home, National Mortgage News reported.
Another provision is protection from tax liability for underwater homeowners in the case of a short sale or if their lender reduces the principal of their loan. The MBA noted that the taxes in these instances are usually substantial, and many borrowers could avoid a large financial burden if EXPIRE is reinstated.
The fixed interest rate for housing projects financed with the Low Income Housing Tax Credit would not be changed under EXPIRE. However, if the act is not reinstated, financing for such low-income housing could be difficult to achieve, as there will be a variable interest rate instead.
Readers should know that during and following the housing downturn, the U.S. government devised many others plans and pieces of legislation that aided homeowners in times of crisis.
Such measures have been created to prevent a repeat of the foreclosure crisis, which rocked the nation for a few years and left many Americans without a home. The Making Home Affordable Program has shown notable success in preventing foreclosure actions. This is also true of the Home Affordable Refinance Program, which has helped more than 1 billion struggling homeowners find the best mortgage refinance rates and keep their homes.
For more information about beneficial homeowner programs, including mortgage refinance options, contact The Federal Savings Bank, a veteran owned bank.