I am pleased that the President recognized this legislation and I look forward to working with the Administration and my colleagues in the Congress to get this enacted.  The recent decline in the nation’s housing market has had a devastating effect on homeowners.  Many have had to sell their homes for less than they paid for them, and many times these people have leftover mortgage debt owed to their bank.  Banks will sometimes forgive this debt because the homeowner has undergone enough hardship.  When this happens, however, the homeowner must pay income tax on this forgiven debt!  It is patently unfair to tax people on this “phantom� income, particularly when they have just suffered serious economic loss.  That is why I have introduced the Mortgage Cancellation Relief Act (HR 1876), which will relieve this unfair tax burden.

None of us want to learn that our families will be forced to pay taxes when they have no money and have incurred a substantial loss on what, for most, is the most significant asset they own.  We do not want to learn that the IRS has the power to make them homeless because they have neither equity nor cash.  My legislation will prevent a fundamental unfairness in the lives of those who find themselves in these truly unfortunate circumstances.

This entry was posted on Saturday, September 1st, 2007 at 10:42 am and is filed under Politics, Economy/Budget .