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    12062012 – Sheepskins, the Debt Forgiveness act and falling over the fiscal cliff

    With so much going on with us potentially headed over the Fiscal Cliff, we are poised, ready and will have our life-jackets mended from the last time something “big” hit.  That “last time” was nearing the end of 2006 and the beginning of 2007.  Remember that big sub prime bank – they fell?  The market dropped and caused the past reductions in home prices and increases in defaults by homeowners.

    Run Away from the fiscal cliffReference:  View the Notice of Default Filings on Paris911

    Today we have several things that are disconcerting to the real estate interested public at large.  The Mortgage Interest Deduction potentially being lowered to 500K maximum – from the 1M where it is now.  The Debt forgiveness act – that was implemented by Bush back in 2007 and is set to expire December 31, 2012.  The additional taxes for earners of over 250K.

    That is a pretty big cliff and is going to create havoc if not remedied. Today in the Santa Clarita Valley we have seen numbers reported showing that Short Sale’s have increased at the end of the third quarter Q3.  However, what is going to happen with those short sales that are not going to finish by the Drop Dead Date for the debt forgiveness act?

    Reference:  See the current California short sale inventory

    Are the sellers going to throw their hands up and say, “The heck with it?”  Or are they going to still have their agents push forward with getting the short sale concluded?  I know what I’d do and it’s not just because we handle short sales.  If the Debt Forgiveness Act is reaffirmed sometime in 2013 – it will most likely be retroactive.  A short sale seller does not want to cut off their nose to spite their face 🙂 (thanks dad for that one – still with me).

    In addition, the short sale sellers may be within a binding real estate deal with a buyer with an executed contract between themselves and that buyer.  They do not want to risk a potential lawsuit because of breech of contract.

    When talking to my eldest, I attempt to impress upon him the “world” way.  It is not that you need college to succeed in life.  There are a lot of brilliant people in the world that have not attended an institute of higher education and have done better than those that have.  I can give plenty of those examples.  College does not make one brilliant either – I have even more examples of that.  But if you are wanting to work for most companies with a “high ceiling” of influence – by not obtaining that college degree – you are not able to get past the first gatekeeper.  I explained to him that without College – you cannot get that first interview.  They will round-file your application when they are expecting to see the price of admission being a college degree.  

    Reference:  View the Santa Clarita business blog

    So, no matter what it takes – get educated.  If you have to work at a gas station then with a local Sheriff’s department in the jails to pay your way, as I did, then do it!  You can sleep later 🙂  And to answer your question, I did not have to walk up hill in 5 feet of snow to school – both ways 🙂

    Be Safe – please subscribe to our monthly updates – You will be glad you did and we promise only to highlight the past two weeks of Santa Clarita Real Estate events and beyond.  Talk soon and thanks for reading and listening.

    Reference:  Click here to subscribe – or you can type in your email address below too!

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