{on the hill} Bills on the Move

by User Not Found | Dec 30, 2015
The first half of the 2015-2016 legislative session wrapped up in November and left a lot of legislation still pending. The House and Senate got off to a slow start due to disagreements between the two chambers relative to the rules that will govern this session.  Despite the delays, here are a few pieces of legislation supported by REALTORS® that moved during the first half of the session. 

Mortgage Forgiveness Debt Relief

The Joint Committee on Revenue gave a favorable report to a bill that would allow homeowners to complete loan modifications, short sales, and foreclosures for which they have debt forgiven without making them liable to pay state taxes on the debt. This would mirror the federal tax law, the Mortgage Debt Relief Act of 2007, and allow taxpayers to apply for this exclusion on their state tax return. The general tax rule that applies to debt forgiven treats the amount forgiven, sometimes referred to as phantom income, as taxable income to the borrower. MAR testified before the committee on the importance of this tax provision and the impact that it could have on the housing market in Massachusetts. 

Foreclosure Title Clearing 

On November 28, Governor Baker signed An Act clearing titles to foreclosed properties into law. The 2011 Supreme Judicial Court decision, U.S. Bank National Association vs. Ibanez had a startling effect on the sale of foreclosed residential real estate in Massachusetts. Good faith purchasers of the foreclosed homes could not sell or refinance their homes because of the uncertainty over title. The new law creates a three-year statute of limitations for a party to dispute the title of a property in a foreclosure by sale. Under this new law, bona fide purchasers will be protected by limiting the amount of time people would have to challenge the legitimacy of a foreclosure and sue for title to three years.