Q: It seems to be a stretch-it-out game by the banks on approving short sales. Could that be that the tax relief put in by President George W. Bush that will be ending soon? Do you think it will be extended?
— Randall B., Henderson
A: To answer your first question, I know many local homeowners and real estate professionals are still frustrated about how long it can take and how complicated it can be to get through the short sale process.
However, I’m not sure if the length of time it takes banks to approve short sales can be tied to the federal Mortgage Forgiveness Debt Relief Act of 2007.
I know that Congress has been talking about extending the relief act for at least one more year, even if it has to do so retroactively.
Our leaders and government affairs experts at the Greater Las Vegas Association of Realtors have discussed this issue with some members of Congress, including Nevada’s congressional delegation such as Rep. Joe Heck, Sen. Dean Heller, R, Nev., and Senate Majority Leader Harry Reid, D, Nev., who are all pushing to extend the act, which expired Dec. 31.
Reid and his representatives have been talking publicly for months about how he supports efforts to extend the act. And Heck and Heller are among the sponsors of bills that would do just that.
I can also tell you that the National Association of Realtors is lobbying to extend the act.
For those who don’t know, a short sale occurs when a lender agrees to sell a home for less than what the borrower owes on the mortgage.
In recent years, short sales have been more common in Nevada than in other states. Real estate analytics firm RealtyTrac reported that Nevada led the nation in the percentage of homes sold through short sales in November, when GLVAR statistics show that short sales accounted for 21 percent of existing local home sales.
That’s well below the peak in December 2012, when 46 percent of existing local home sales were short sales. But it’s still a significant number.
If Congress does not extend the Mortgage Forgiveness Debt Relief Act, I would expect to see fewer short sales this year and beyond. That’s because any amount of money a bank writes off in agreeing to sell a home as part of a short sale starting this year may become taxable for sellers.
I think we should do everything we can to extend the act to help homeowners nationwide who will benefit from a short sale. A short sale is almost always better for everyone involved than a foreclosure.
Like thousands of homeowners and Realtors who survived the Great Recession, I know how hard Nevada was hit compared with most states.
We’ll keep lobbying for the extension and keep you posted on our progress.
Heidi Kasama is the 2014 president of the Greater Las Vegas Association of Realtors, and has been a local Realtor for more than 11 years. GLVAR has more than 11,000 members. E-mail questions to firstname.lastname@example.org. For more information, visit www.lasvegasrealtor.com.