WASHINGTON, DC – House Majority Leader Steny H. Hoyer (MD) released the following statement this afternoon regarding the Mortgage Forgiveness Debt Relief Act (H.R. 3648), which passed with overwhelming bipartisan support, 386-27:
“This important legislation – the Mortgage Forgiveness Debt Relief Act – is yet another concrete example of how this Democratic House Majority is focused on common-sense, bipartisan solutions and working to address the priorities of the American people.
“The reality is, there is a housing crisis in America today, with home values plummeting after historic gains in many parts of the country during the first half of the decade and with large numbers of homeowners struggling to make ends meet and now facing foreclosure. It's estimated that 2 million American families could lose their homes to foreclosure due to rising interest rates in the current housing market crisis.
“This legislation is simply intended to mitigate the harsh effect of current law. Today, debt forgiven following mortgage foreclosure or renegotiation is considered income for tax purposes, resulting in tax liability for individuals and families which clearly are struggling to make ends meet. People facing foreclosure usually are in financial straits, and the last thing they needs is a hefty tax bill for ‘phantom’ income.
“I applaud our Ways and Means Committee Chairman, Charlie Rangel (D-NY), for steering this legislation to passage and congratulate those who worked very hard on the bill, including Freshman Zack Space (D-OH).”