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Mortgage Debt Forgiveness Tax Relief – House

Urge Congress Extend Mortgage Debt Forgiveness Tax Relief

The income tax exemption on mortgage debt forgiven in a short sale or a workout for principal residences expired at the end of 2013.  Without immediate action by Congress, distressed homeowners will have to pay tax on “phantom income” from forgiven debt.  Many families have decided not to go through with short sales or seek workouts because of the uncertainty over the status of the waiver.  This is not only unfair but harms families, neighborhoods and communities.  Please urge your representative and senators in Congress to extend this tax relief now.

  • Despite significant market recovery, more than 5 million are still “under water.”
  • Nearly 1 million households are seriously delinquent on their mortgages or in foreclosure.
  • Mortgage debt forgiveness tax relief is vital for these families.

**PLEASE NOTE. You’ll have an option to send a letter to the Senate after you take action on this alert!**

Link to the Advocacy Letter 

This article is provided by the National Association of REALTORS website.  Please click here to learn more at:   https://realtorparty.realtoractioncenter.com/site/Advocacy?cmd=display&page=UserAction&id=3381

Mortgage Debt Forgiveness Tax Relief

Dear [Decision Maker],

Every day that Congress fails to bring certainty on the expired tax provisions, more homeowners are faced with the awful choice between a tax bill they are unable to pay and losing their home to foreclosure. That’s why I am writing as your constituent and one of the one million members of the National Association of REALTORS(R), urging you to ask House leaders to schedule a vote on H.R. 2994, ”The Mortgage Forgiveness Tax Relief Act,” as soon as possible in the ”lame duck” session of Congress.

This bipartisan legislation would extend an expired provision that has helped millions of distressed American families by allowing tax relief for homeowners when lenders forgive some portion of the mortgage debt they owe.

Today’s housing market is finally recovering. However, there are still too many homeowners unable to meet their mortgage obligations. Estimates show that about 5.3 million homes are still under water. In addition, there are still more than 1 million homes in the process of foreclosure.

If H.R. 2994 is not enacted, hundreds of thousands of American families who did the right thing by short-selling their home will have to pay income tax on ”phantom income.” Moreover, more distressed homeowners will decide to take a pass on opportunities for short sales, opting instead for continued delinquency or possible default until foreclosure, or simply to walk away from the property. This will destabilize the communities where such homes are located.