It’s a great time to do a short sale.
Banks have finally realized they have much more to gain by agreeing to a short sale rather than allowing a home to go through foreclosure.
Data released by RealtyTrac today shows pre-foreclosure sales, which are often short sales, were up 15% in the fourth quarter of 2011.
It’s easier than ever before to walk away without a deficiency and maybe even thousands of dollars in your pocket.
And to top it off you usually don’t have to pay taxes on the debt you walked away from when you agreed to the short sale on your primary residence.
If you can’t stay in your home, this is frequently the best possible scenario.
You don’t have to pay taxes on that debt because of the Mortgage Forgiveness Debt Relief Act, which was enacted in 2007 as President George W. Bush was leaving office.
But like all good things, it may not last.