Mortgage Cancellation Bill Passes the House

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Real Estate Agent with Brand Name Real Estate


Until recently, I had never heard of a homeowner having to pay taxes on part of the value of their home after having been foreclosed.  It seems that if the property is sold at foreclosure or is sold for less than what was borrowed, that difference is considered income and is currently subject to be taxed.

It makes absolutley no sense.  If someone loses their home because they can no longer afford the mortgage payments, then how in the world are they supposed to afford the taxes on the home they no longer have -- especially when that number can be quite large?

Well, the government in the past few weeks has decided to jump in and do something about this ridiculous predicament.

The U.S. House of Representatives voted last Thursday to get rid of the tax burden for homeowners who have had a loan forgiven or foreclosed on their home because they were unable to make their mortgage payments. The Mortgage Cancellation Tax Relief Act, H.R. 3648, passed by a vote of 386 to 27. Similar legislation is making its way through the Senate.

Since the early 1990s, NAR has supported such measures to eliminate the "phantom tax" on financially-strapped home owners.

"Congress made a good decision that will affect many Americans who find themselves in a truly bad situation," says NAR President Pat V. Combs. "Changing the IRS code is an issue of fundamental fairness. It would relieve a tax burden at a time when an individual or family has experienced a true economic loss arising from the sale or loss of their home."

Hopefully this will make it into law in the very near future.  It will amount to one less stress on already over-burdened individuals.

 

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Rainmaker
420,201
Melissa Marro
Watson Realty Corp - Saint Augustine, FL
St Augustine, St Johns, Ponte Vedra
Wow, I had no idea...... this is INSANITY!  Good to hear Congress is doing something for a change....
Oct 09, 2007 08:12 PM #1
Rainmaker
656,345
Jim & Maria Hart
Brand Name Real Estate - Charleston, SC
Charleston, SC Real Estate
Melissa, my thoughts exactly!  I'm looking forward to this becoming law in the near future.
Oct 09, 2007 08:23 PM #2
Rainmaker
356,608
Donna Yates Real Estate - serving
ReMax Town and Country - Blue Ridge, GA
North Georgia Metro & Mountains
It's good to see the government take action that actually makes sense.  I didn't know about this either.  Thanks for bringing it to our attention.
Oct 25, 2007 07:36 AM #3
Rainmaker
656,345
Jim & Maria Hart
Brand Name Real Estate - Charleston, SC
Charleston, SC Real Estate
Donna: You're welcome.  It's quite refreshing to see the government taking a stance like this and taking action. 
Oct 25, 2007 07:04 PM #4
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Rainmaker
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Jim & Maria Hart

Charleston, SC Real Estate
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