Comments on: First Thoughts On The Foreclosure Relief Initiative http://www.butthenwhat.com/?p=1873 By Tom Lindmark Sat, 04 Sep 2010 19:58:46 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: TomLindmark1 http://www.butthenwhat.com/?p=1873&cpage=1#comment-3115 TomLindmark1 Sun, 03 May 2009 17:03:59 +0000 http://www.butthenwhat.com/?p=1873#comment-3115 Hell of a deal. I'm not an accountant but I believe that the government amended the rules to exempt taxes on debt that is reduced through modification. I suggest you contact a professional of see if GMAC can give you firm advice on this one. I think that this would show up on your credit report simply as a refi. It shouldn't have much of an effect. Even if it did, the benefit is probably worth a temporary hit to your FICO score. Hell of a deal. I'm not an accountant but I believe that the government amended the rules to exempt taxes on debt that is reduced through modification. I suggest you contact a professional of see if GMAC can give you firm advice on this one.

I think that this would show up on your credit report simply as a refi. It shouldn't have much of an effect.

Even if it did, the benefit is probably worth a temporary hit to your FICO score.

]]> By: CjV http://www.butthenwhat.com/?p=1873&cpage=1#comment-3114 CjV Sun, 03 May 2009 16:47:09 +0000 http://www.butthenwhat.com/?p=1873#comment-3114 We live in Southern California and just received unsolicited offer from GMAC to refinance under this program, they have offered to forgive $110,000+ on the principle. What are the tax & credit implications? Is the reduced debt considered income? Is there a negative effect on credit? Initial contact was early last week, they have already sent the loan documents but they do not provide any details on that portion of the modification. We will be contact them for their explanation... always looking for more than one opinion. On the surface it appears to be a great opportunity, but I wonder if the benefits are reduced by the tax & credit liabilities. We live in Southern California and just received unsolicited offer from GMAC to refinance under this program, they have offered to forgive $110,000+ on the principle. What are the tax & credit implications? Is the reduced debt considered income? Is there a negative effect on credit?

Initial contact was early last week, they have already sent the loan documents but they do not provide any details on that portion of the modification. We will be contact them for their explanation… always looking for more than one opinion.

On the surface it appears to be a great opportunity, but I wonder if the benefits are reduced by the tax & credit liabilities.

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