President Bush has signed a bill into law that gives a tax break to homeowners who have mortgage debt forgiven as part of a foreclosure or renegotiation of a loan. No taxes would be owed on the value of any debt forgiven or written off. Currently such debt forgiveness is taxable income. While the measure is anticipated to reduce taxes of some strapped homeowners by $650 million, the cost to the government would be offset in part by limiting a tax break available on the sale of second homes. Broker fees may come in different forms, either as an addition to your interest rate, a separate fee, or points paid at closing. With all these additional fees, you might find that your best mortgage rate deal may not sound so great after all.
