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.

There is growing speculation that this tax break, which will expire at the end of 2012, will not be renewed.

Even though the bill passed with overwhelming bipartisan support and was enacted by a GOP President, tea partiers and Republican strategists alike seem fixated on the ‘moral contagion’ factor as well as the program’s $2.7 billion price tag.

Which means that if you agree to a short sale on your $200,000 home for only 150K, you could have to cough up taxes on the $50,000 of forgiven debt.

Currently the Debt Relief Act allows for up tax relief on up to $1 million of debt if you’re single, $2 million if you are married.

Once again there’s a lot of talk from some conservatives about the cost to the taxpayer. Never mind the fact that President Obama and the $25 billion settlement has made principal reductions and loan modifications the centerpieces for stabilizing the housing market.

So even the idea that this tax break might not see the light of day in 2013 is a slap in the face to everything the Attorneys General spent months haggling over.

The same government that is dangling the carrot of refinancing in front of you might very well bat it away with a massive tax bill.

Bottom line, if you’re thinking about a short sale, get started NOW. Short sales can sometimes take months to complete, and if you wait til one minute after the clock strikes midnight on December 31st, you run the risk of your beautiful stage coach turning back into a pumpkin.

It is of course an election year, so this lame brain duck Congress cannot be counted on to come through for homeowners. I thoroughly expect them to let the Debt Relief Act lapse, and once again you’ll be on the hook for taxes on ‘loan forgiveness income’.

Loan forgiveness income. If that’s not an oxymoron, then I don’t know what is!

So if you like to gamble, wait until 2013. I however, would not.

Borrowers can avoid this exit with a short sale!

The short sale has and will always be a much better alternative for the banks. In many cases, when modification isn’t an option, a short sale is better for the existing homeowners as well.

It’s good for the banks because it’s the fastest way to bring down their massive backlog of foreclosures.

Now that more and more foreclosures are lingering in the courts, banks now realize its the simplest way to get these homes back on the market, sometimes in just a few months.

They may not get back the full value of the home but their losses are about 15 percent less than if the home was foreclosed on, according to Bloomberg News.

It’s good for the borrower because they can walk away, legally, with little or no debt at all. Some banks are even offering cash incentives, as much as $35,000 in some cases, to entice homeowners to sell back their homes.

It’s win-win! In fact, it’s better than that. It’s win-win-win! The stress, the headaches, the months and years of inaction, can be put to bed with a short sale.

A short sale, in short, is quite simple. A distressed homeowner can sell their home for less than what they originally owe. Banks will often agree to not go after a deficiency judgment if borrowers agree to a short sale.

JP Morgan, who approves about 5,000 short sales a month, is giving the largest incentives, but more and more lenders are now agreeing to them.

There’s a ripple effect here that’s good for everyone. The seller gets to leave foreclosure hell once and for all, and can get money to help them transition into a rental and start fresh.

A new family gets to buy the home at a nice discount, and the neighbors don’t have to live next to an abandoned home or deal with having a non-caring faceless entity, namely the banks as their neighbor.

The lawn guy, the bug guy get back to work, and the new owners buy new furniture, new drapes, and suddenly the economy is bouncing back!

Banks might have thought foreclosing was the right idea. It wasn’t then, it isn’t now, and it will never be.

Do such offers signify that banks have learned their lesson and are trying to get out of sub-prime loans, or are they looking to just prevent further losses? Perhaps the answer is that the banks are concerned about existing home prices. Bank of America’s chief economist, Mickey Levy, while speaking privately, spoke of the concern that the 1.8 million bad loans in the nation will drive down the market if they go into foreclosure. Such fears help explain why the banks are desperate to avoid foreclosing on homes. They don’t want the rest of their loans to become vulnerable: the more foreclosures, the more house prices fall, therefore, the value of the banks’ loans go down and more people want to walk away from their homes, causing the banks even more losses.

In the end, this situation is a win-win. Not only do banks protect home prices, but they stand to get back more money quicker from a short sale than a foreclosure and the good publicity would be a nice change of pace for their PR departments. Homeowners in trouble are also helped because they can get out of their houses with some cash in their pockets and get on with the rest of their lives.

While we have addressed the deficiency judgment issue for years now, the Sun-Sentinel has now also reported on the danger of what will soon happen. In two or three years, when big banks catch up with their foreclosures, we will see a flood of such deficiency judgments. The main targets of the big banks will be strategic defaulters. Strategic defaulters are the folks who could afford their mortgages but defaulted because they are so underwater that it didn’t make any sense to pay. Not every strategic defaulter has to worry though. A deficiency judgment can only be entered in foreclosure cases. Short sales cannot lead to a judgment being entered against you unless the bank decides to file an action and litigate in court. An action would require the bank to pay attorneys and other fees with no guarantee of success and scrutiny of their documents, which might lead to sanction if fraud is uncovered.

There is still some time left before we are inundated with deficiency judgments. Nevertheless, everyone going through the foreclosure or short sale processes needs to be on their guard. We here at Oppenheim Law have seen a recent up tick in banks pursuing deficiency judgments. Steps can be taken now that will help protect people against this worst-case scenario, as we have successfully been doing in the last few years.

Well, that seems to be the case here in Florida as it relates to real estate and foreclosures. The news this past week has been that median prices have increased by approximately 22 percent in the past year in South Florida and sales of homes actually also has increased 12 percent from last year.

During the past six months, however, there has been a drastic reduction in the number of foreclosures that have been processed and brought to market due to the fraud-closure crisis that became apparent last fall.

Fast forward to today and we’re seeing the resurgence of the foreclosure crisis. Many of the foreclosure mills have shut down and are being replaced by new firms, many of whom will not process as many cases. Just in the past ten days we have seen an increase in the number of people served in foreclosure and the scuttlebutt is that the process this time around will be faster and more furious.

The unfortunate aspect of all this is just as the real estate market was starting to find its footing, and some even would say slightly rebound, these new foreclosures will either reduce the price of existing real estate or, in fact, bring down prices another 10 or 20 percent. Of course no one knows for sure how buyers will react. Will such additional foreclosures encourage even more buyers to come into the market because they’re getting even a better deal – or will the number of buyers in the market be somewhat fixed or stagnant; increasing supply and reducing the market price of homes?

So it seems that only one thing is now certain – when there is any kind of certainty you can expect to be surprised or to be unnerved.

In Sun-Sentinel reporter Paul Owers’ blog House Keys, Owers discusses the ramifications of Broward County now requiring 10 days’ notice to cancel residential foreclosure auctions according to an administrative order signed by Broward Chief Judge Victor Tobin.

Prior to the Administrative Order, Broward foreclosure auctions could be cancelled only hours before the sale. Now, homeowners looking to cancel a home foreclosure in Broward County are forced to file a motion and be scheduled for a hearing at least 10 business days before the foreclosure sale date.

Oppenheim Law Real Estate Attorney and Legal Bogger Roy Oppenheim was quoted in the article saying, “This will have unintended consequences. Clearly, the homeowner gets the short end of the stick here.”

Effectively, this order limits the time homeowners have to negotiate a short sale or loan modification before their home is put up for auction. Before the order, these deals could be completed up to the last minute.

This order appears to be an attempt to eliminate the backlog of foreclosure cases by limiting the number of homeowners who cancel their foreclosure auctions.

“Roy Oppenheim gets it, and I agree with him,” said Ronald Scott Kaniuk in a comment to the blog. “Courts throughout the state are trying to expedite foreclosures in the mistaken belief that completing foreclosures – even if the process is flawed, improper or ill-advised – is better than having cases continue to proceed on a normal track like any other litigation.”

“The fact is that these rules are ad hoc and apply only to foreclosure cases, relegating a whole class of defendants to different treatment,” Kaniuk continued. “This process doesn’t help anyone except the banks, who don’t need any more help, or bailouts for that matter.”

Why isn’t Wall Street in Jail? Is our government a giant Ponzi scheme?

These are the questions Roy Oppenheim asked during Wednesday night’s Short Sale and Foreclosure Defense seminar.

During the webcast, Oppenheim discusses how with the departure of Fannie Mae and Freddie Mac also goes the traditional 30-year mortgage, paving the way for a new 20-year mortgage, higher interest rates and larger down payments. In other words, buying a house just got harder.

Roy also touched on recent news headlines, including the 60 Minutes piece titled Homeless Children: The Hard Times Generation, New York Magazine’s jailhouse interview with master manipulator Bernie Madoff, and scathing commentary by Rolling Stone Magazine’s Matt Taibbi on Wall Street’s modus operandi.

If you missed this hour of economic insight from a leading industry expert, the replay will be available on Oppenheim Law TV and the Oppenheim Law YouTube channel for the next 30 days! We want to remind you that as the short sale market heats up, Oppenheimlaw and Weston Title are here to service all your legal and title insurance related needs.

Homeownership will no longer define the American Dream. That’s because 30-year, fixed-mortgage loans that we’ve known since the 1950s may become a luxury if the federal government tightens constraints on Fannie Mae and Freddie Mac—the two lenders that historically backed home loans for the masses (even with far less than perfect credit scores). Indeed, a private mortgage finance market could emerge with entirely new rules—rules that make it harder and more expensive to get a loan.

Next, consider convicted Ponzi scheme mastermind Bernie Madoff’s comments from his prison cell. Madoff told New York magazine that Goldman Sachs, Merrill Lynch and Morgan Stanley Smith Barney knew all along that he was working the system—and did nothing. Madoff suggested that the entire government is a Ponzi scheme. What if Madoff is right? It’s a disturbing thought…

That leads us to the question, “Why isn’t Wall Street in Jail?” Where’s the accountability? Clearly, greedy banks did their dirty deeds and clearly American taxpayers are footing the bill. Wealth has been destroyed. Lives ruined. Yet Wall Street—and the prominent firms that make up the financial services industry—seem to be living above the law.

What’s an American homeowner—or foreclosure victim—to do?

Join Oppenheim Law tonight, March 9 at 6 p.m. Roy Oppenheim is holding a real estate workshop where he discusses how the aftermath of Wall Street’s greed is still affecting homeowners across the country and what you can do to pull yourself out of the hole the banks created. Oppenheim will also share how rising oil prices, continued unemployment and the possibility of an American double-dip recession is impacting the South Florida real estate market, as well as the pros and cons of how changes to mortgage options could impact South Florida foreclosures and short sales.

What: Global Impact on Florida Short Sales and Foreclosures Workshop

Where: Oppenheim Law TV

Or come in person: 95 NW 11th St., Boca Raton, FL 33432

Cost: Free with advanced registration

RSVP: To register, email jackie@oplaw.net or call 954.384.6114

So the tune Goodbye Yellow Brick Road is sounding the same as Goodbye American Dream as we say see you later to 30-Year Mortgages. The fact is, without housing finance giants Fannie Mae and Freddie Mac, the 30-year mortgage might fade away, leaving many potential homeowners with little to no financing options.

The 30-year fixed-rate mortgage loan has been a steady favorite of American borrowers since the 1950s and is now on its way to become a luxury product.

What would real estate be like without Fannie Mae and Freddie Mac?

According to The New York Times, life without Fannie and Freddie is the rare goal shared by the Obama administration and House Republicans after the two giants misused the government’s support to enrich shareholders and executives by backing millions of shoddy loans.

Taxpayers have spent more than $135 billion righting those wrongs.

However grave the transgressions, there would be consequences for Americans if Fannie and Freddie are shut down. Interest rates would rise for most borrowers, and lenders could start charging fees for locking in those rates weeks or months before taking out a loan.

Still, other politicians favor a purely private mortgage finance market.

Join Oppenheim Law on March 9 as Roy Oppenheim discusses the pros and cons of each system and shares how the options would affect South Florida foreclosures and short sales.

Join Florida Foreclosure Defense and Short Sale Attorney Roy Oppenheim March 9th at 6 PM.

“Not a single financial executive has gone to jail”…that is how Producer Charles Ferguson rocked the Oscars by starting his acceptance speech for winning best feature documentary for “Inside Job,” a film about the 2008 financial system meltdown. How appropriate.

Meanwhile, Florida real estate is no red carpet winner when it comes to the housing market. Oppenheim Law announces its real estate webinar streaming live Wednesday March 9th at 6 pm, designed to help Florida homeowners use today’s economic conditions to their advantage and fashion their own bailouts.

In this timely workshop, Oppenheim shares fresh insights, including:

• How the rising price of oil will affect the American job market, and in turn affect the housing market.
• What these trends mean for Florida foreclosure defense and how homeowners can use these events to their advantage to engineer and structure a short sale.
• The impact that a sluggish start to the national “selling season” will have on a local level.
• Why home prices will continue to drop in the months ahead.
• And how a double dip recession could impact homeowners in the coming months.

Florida real estate is not immune to the financial system melt down or the recent world events, according to Florida Foreclosure Defense Attorney and Legal Blogger Roy Oppenheim.

As revolutionary tremors continue to spread through the Middle East and actual tremors rocked New Zealand with a 6.3 magnitude earthquake, Oppenheim Law offers insight on how these international events could impact Florida’s real estate market as well as sharing the latest legal trends in foreclosure defense and short sales strategies.

What: Global Impact on Florida Short Sales and Foreclosures Workshop

Where: Oppenheim Law TV

Or come in person:

95 NW 11th St., Boca Raton, FL 33432

Cost: Free with advanced registration

RSVP: To register, email jackie@oplaw.net or call 954.384.6114