California is playing catch-up with the federal government on an important issue for struggling borrowers.
That's tax relief for forgiven mortgage debt.
In December, the federal government agreed that the IRS temporarily won't tax people who sell their home for less than they owe or get lenders to forgive some of their debt in a workout solution.
Traditionally, the IRS considers forgiven debt extra income for tax purposes. The state of California still does.
That's likely to change soon. State lawmakers have introduced Senate Bill 1055 to give tax relief to homeowners in trouble. It applies to any mortgage debt forgiven after Jan. 1, 2007, and before Jan. 1, 2009. Just like the federal law, it would be a temporary measure to expire when the housing market rebounds.
None of this applies to investors, however.
The bill is before the Senate Committee on Revenue and Taxation.
Too good to be true?
Considering the well-documented damage from all the alluring offers about low house payments and quick, easy money, you'd think they'd be history by now.
But notices of tempting teaser rates and probably too-good-to-be-true monthly payments can still be found online and in your mailbox.
The California Department of Real Estate says you should be very cautious about calling a loan agent when you see these warning signs:
• Any advertisement that promises a very low interest rate, such as 1 percent, or an extremely low monthly payment.
• Ads that appear to be from your current lender but are not.
• Ads that appear to be from a government agency or are made to look like a government form.
• Ads that make you think the loan is a fixed-rate loan but also offer very low interest rates or payments.
• Pitches that say you can get a mortgage with no costs or fees. Those fees may be hidden inside a very high interest rate.
Do you have questions about a loan company's license, advertisement or other loan issues? Call the Department of Real Estate's mortgage loan activities unit at (916) 227-0770.
Workshops for borrowers
Lenders repossessed 84,000 houses in California in 2007. No one wants to see those numbers climb that high this year.
So the state Consumer Services Agency and the Business, Transportation and Housing Agency are hosting a series of free loan counseling workshops around the state to help troubled subprime borrowers.
The next one locally is scheduled from 10 a.m. to 1 p.m. Feb. 16 at Antioch Progressive Baptist Church, 7650 Amherst St., in Sacramento. The host is state Sen. Darrell Steinberg, D-Sacramento.
Borrowers should bring loan documents and financial information. For more information, go to www.yourhome.ca.gov/events or, in Spanish, at www.sucasa.ca.gov/events-sp.
The auctions continue
More troubled housing talk: One of the biggest bank-owned home auctions yet is set for Feb. 16-17 at Cal Expo.
Real Estate Disposition Corp., an Irvine auction firm, aims to unload more than 300 houses located in area counties during the two-day event. That's about one-third of the nearly 1,000 homes going on the auction block during seven days in Stockton, Sacramento, Modesto, Fresno and San Mateo.
The Sacramento-area houses will be open for inspection from 10 a.m. to 5 p.m. on Saturday and Feb. 9-10, according to REDC.
The Northern California auction follows a five-day run in Southern California that aims to sell more than 1,100 bank-owned houses.
For more information: www.ushomeauction.com.
Call The Bee's Jim Wasserman, (916) 321-1102
