Stabenow Mortgage Tax Legislation Passes Senate
Senate passes two bills to help families in mortgage crisis
U.S. Senator Debbie Stabenow (D-MI) today announced passage of her mortgage tax relief legislation changing current law that forces individuals to pay an income tax when they have had a part of their mortgage loan forgiven or have been forced to foreclose because of their inability to pay their mortgage.
"No one who is faced with losing their home should be faced with an additional tax bill," said Stabenow. "Turning my legislation into law is a good first step, but we need to do more to assist families in danger of losing their homes."
Declining home prices and rising foreclosure rates have left some middle-class families having to sell their homes for less than they paid for them, and sometimes for less than the outstanding debt. The IRS currently taxes any loan forgiveness as "income". The Mortgage Cancellation Relief Act will relieve families of a tax burden when their lender forgives part of the mortgage on a principal residence.
Senator Stabenow recently met with the U.S. Conference of Mayors and last month, as chair of the Democratic Steering and Outreach Committee, brought together Senators, representatives of the housing industry and advocacy groups to discuss how we can work together to address families struggling to keep their homes.
Also today, Stabenow led the effort to pass the FHA Modernization Act that would expand access to FHA loans, help seniors stay in their homes and improve FHA oversight programs. Additionally, as a member of the Senate Budget Committee, Stabenow led the effort to insert funding to reach out and educate families on the options they have when they find themselves facing foreclosure.
Michigan has recorded over 135,000 foreclosure filings on the year. The Detroit metropolitan area ranked second highest in the third quarter for the rate of households in foreclosure in the 100 largest metropolitan areas, with 1 out of every 33 households.