A Bill Idea for my Legislative Friends
This is a MUST in the Republican bill package for the upcoming session.
Democrats in the Legislature claim to be for the working man, to help people in their time of need. The problem is this — in the current economic times, lots of people have experienced serious problems paying for their homes, and in many (if not most) cases, the debt that is secured by their homes is much larger than the value of the homes. To solve this problem, people have begun negotiations with their banks to rewrite the loans, that is, to reduce the amount of the debt on their homes, or in some cases, they have sold their homes to third parties through a process known as a short sale, that is, selling their house for less than the debt, and having the bank agree.
The problem with this process is that, when the debt is renegotiated, there is debt “forgiveness.” That is, if the loan is for $400,000.00, and the house is sold, or the debt is reduced, to $350,000.00 (usually because that is what the house is worth), the borrower (the homeowner) experiences a $50,000.00 debt forgiveness. In the eyes of the California state government today that $50,000.00 of debt… Read More