AGs: Congress Should Extend Mortgage Forgiveness Tax Relief Act

December 19, 2013
Legal Newsline 
mortgage lending news

Attorneys general representing 42 states have dispatched a letter petitioning congressional leaders to extend the Mortgage Forgiveness Tax Relief Act for at least one more year. The law, which was renewed last year, is set to expire on Dec. 31, 2013. "If this deadline is not extended, financially strapped homeowners, even those who lose their home to foreclosure, will be forced to pay taxes as income on any mortgage debt that is forgiven by the holder of the mortgage," the National Association of Attorneys General wrote.

The letter -- delivered to Senate Majority Leader Harry Reid (D-Nev.) and House Speaker John Boehner (R-Ohio), among others -- also warned that strides made through short sales, loan modifications, and other assistance efforts would be muted "if the homeowners that receive mortgage debt relief are hit with tax bills they cannot afford."

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