Friday, February 08, 2008

A Momentary Return to Mortgages

by Ken Houghton

Forbes notes the value of the regressive "Mortgage Forgiveness Debt Relief Act":
It eliminates the tax liability for short-sellers. Before this bill, if you sold a $250,000 home for $200,000, the IRS considered the $50,000 gap earned income and taxed it as such. Not so today.

That's good news for underwater mortgage holders in expensive markets, who are more likely to see larger spreads. Los Angeles County, Calif., Kings County N.Y., and Riverside County, Calif., have the highest instances of homeowners, with more than $100,000 in negative equity. [emphases mine]

Ignore that someone—most likely people who make less than $100,000 in two years—will have to make up this shortfall. Look at that middle location, and translate it into English.


And not likely the outer edges of Brooklyn, those two-fare zones where you could (a few years ago) get a house and some land for $60,000. Probably talking Park Slope and all of the other glory places that gave you "all the advantages of living in New York City."

We're talking about the people to whom many of my neighbors, and others like them, sold.

If Musical Chairs has really stopped in Brooklyn, can Sylvia Miles telling Charlie Sheen that "the market is slow" be far behind?

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