Foster Introduces Legislation to Reduce Burden for Underwater Homeowners

January 14, 2014
Chicago Tribune 
mortgage lending news
U.S. Rep. Bill Foster (D-Ill.) has introduced legislation that would extend tax relief to underwater homeowners who have received loan workouts.

Under the Mortgage Forgiveness Debt Relief Act of 2007, homeowners are not liable for taxes on the difference between the value of their house and the loan modification or short sale amount. Congress had extended the break since 2007 until lawmakers allowed it to expire on Dec. 31, 2013.

Foster's bill, H.R. 3856, the Homeowners Debt Relief Extension Act, would extend the tax relief until Jan. 1, 2016, for debt forgiven after Dec. 31, 2013. The cost of reducing the tax burden for underwater borrowers would be offset by repealing a tax break for oil and gas companies under the Internal Revenue Code's Section 199.

"With millions of struggling homeowners still underwater on their mortgages, now is not the time to cut off this tax credit," according to Foster.

Abstract News © Copyright 2008-2013 INFORMATION, INC.
Powered by Information, Inc.

Stay Updated

Join the fight against predatory lending. Enter your e-mail to sign up for breaking news, action alerts, and CRL's original research.

   Please leave this field empty

Help Us End Predatory Lending

Predatory lending destroys family wealth, and preys on our most vulnerable communities. You can help us end abusive lending practices by donating to CRL, or by sharing our work with others.