U.S. Congress Steps up Pressure
It is not surprising that in light of the recent downturn in the housing market that Congress has stepped up its pressure on mortgage lenders to avoid foreclosures. There are two new bills coming out of the House Judiciary Committee that aim to help out mortgagor’s facing foreclosure.
House bill H.R. 3648 would give tax breaks to those who have mortgage debt forgiven in a foreclosure or loan modification by exempting the forgiven debt from being considered taxable income. According to the Fort Worth Star-Telegram, this would reduce the tax burden by a total of $650 million dollars. The bill was approved in the house by an overwhelming majority of 386-27.
The second bill, H.R. 3609, would revise the current bankruptcy code to give judges in bankruptcy proceedings the power to ease mortgage terms for homeowners in bankruptcy. The bill narrowly made it out of committee after facing opposition from Republicans who fear the negative ramifications on the mortgage sector.
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