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Mortgage Forgiveness Debt Relief Act of 2007

Floor Speech

Location: Washington, DC

MORTGAGE FORGIVENESS DEBT RELIEF ACT OF 2007 -- (Senate - December 14, 2007)


Ms. STABENOW. Mr. President, this is a very important measure we have adopted in the Senate. In fact, today is a very important day for families all across the United States who find themselves in this mortgage crisis that we have been hearing about, that we have been talking about, that we have been meeting about. Two important actions have taken place that will make a real difference in people's lives today. The first was, earlier today, modernization of the Federal Housing Authority, the FHA.

This had not been updated since the 1930s when people were in another time of tremendous crisis, losing their homes.

We have come together today and put forward modernization that will allow more people to be able to get refinancing, to be able to get help and support from the FHA, to be able to keep their homes. That is what we all want, the American dream of keeping our homes, of making sure our families have a roof over their head, that we can invest in equity in a home as part of creating that middle-class dream for ourselves, for our families, and it is how we strengthen the community when we have home ownership.

That is an important piece, and we just adopted the other piece that is very significant, particularly time-sensitive, and that is to make sure that no one who finds themselves in a mortgage foreclosure this year, in 2007, or finds themselves having to refinance their home below the value of their mortgage or through a short sale find themselves in a situation where, on top of losing their home or losing money, they have another tax bill.

Right now, up until the action we took a few moments ago, taxpayers, families across America, would find themselves, for example, in a situation of, if they had a $100,000 mortgage and they refinanced at $80,000 or the bank sold their home on a foreclosure at $80,000, they would find themselves paying taxes on that difference between $100,000 and $80,000, that $20,000 difference. If it was forgiven by the lender, they would pay taxes on that as if it were income. That makes no sense when families are challenged, facing the loss of their homes, struggling to make ends meet--we are coming up to Christmas now--when families are struggling to make sure they have what we all want, to be able to give our children a wonderful Christmas, to be able to have a home for them, a place for the Christmas tree.

There are too many families who now find themselves in a real crisis. I am very grateful to everyone who has been involved in getting us to this point. We have now said loudly and clearly that we understand and we are not going to allow families to have an additional tax burden as a result of being in a foreclosure or in the middle of the mortgage crisis. And the FHA reform that we passed earlier today says: We want to make it better by providing you alternatives and help to be able to keep your home.

I particularly want to thank, first, my cosponsors of the legislation that is the underlying legislation that has resulted in this action today--my Republican cosponsor, Senator Voinovich, who has been just terrific. Both of us come from the Midwest, Michigan and Ohio. We both find ourselves in many similar situations economically, with families who have been faced with the issues of mortgage foreclosure and challenging refinancing situations. I want to thank Senator Voinovich, who is key to the place we are today, in getting to this point. He has played an incredibly important role, and I am grateful to him for that. Senator JOHN KERRY has also been very helpful, and his staff; Senator Levin, my partner, who is always there, both of us working on behalf of Michigan; and Senators SNOWE, BROWN, HATCH, COLEMAN, SCHUMER, HARRY REID, NELSON, KLOBUCHAR, LIEBERMAN, HARKIN, and SALAZAR.

Of course, we would not be here without our leader, Senator HARRY REID. I know this is a personal concern to him in Nevada. I know that in his State there is a real challenge, as in mine, as it relates to the mortgage crisis, and he has made this a personal priority, and I am very grateful for his support.

Of course, Senator Baucus, our chairman of the Finance Committee, without whom, also, we would not be here, if it was not for his leadership, and his partner, Senator Grassley, without their bipartisan working relationship--they are so extraordinary--we would not have an opportunity to address this issue and pass this legislation.

We held a hearing earlier this week, and I want to thank again our Finance Committee chairman for focusing a bright light on this mortgage crisis, what is happening not only in the subprime lending market but in the general economy as it relates to the ripple effect in the housing crisis, and his commitment has brought us to this point. I want to thank him.

I also want to thank Senator JUDD GREGG, who brought this issue to the debate on the farm bill and, frankly, was very instrumental in bringing this focus to the Senate floor, very articulate in explaining what the problems are that families are facing, and he, too, deserves a lot of credit for being a part of the effort to get us to this point and getting the actual bill passed this year.

Finally, I want to thank the White House. I think it is fair to say that there are not a lot of issues in which I find myself on the same side as our President, but this is one of those on which we have worked very well together. I appreciate his staff's good will in working with us to be able to get this done.

This was an important bipartisan effort from top to bottom, and I think we can all be pleased and grateful that we have the opportunity to work together to really get something done. That is what people want us to do. I know our Presiding Officer understands that, that people want us to work together, they want us to understand what is going on in their lives and that it is not just a game, that there are real things that need to be fixed, that we need to solve problems. I know that is why we have come here. The examples today, working together on the Mortgage Debt Forgiveness Act and FHA, are two examples of what happens when we work together.

I am a member of the Agriculture Committee and proudly have worked with our chairman and ranking member and all of the members of the committee to get a farm bill passed, a Food and Energy Security Act that is good for the country, not just for rural America but for all Americans and for our economy.

So this is a day--we have the Department of Defense authorization that was passed--this is a day of good cheer, a day of showing what we can do with the right kind of leadership, and I again thank Senator Reid for providing that leadership. He and Senator McConnell, working together on the efforts that we were able to pass today, have made a real difference.

We have, in fact, as it relates to families who find themselves in a very difficult crisis or on the verge of a crisis related to losing their homes, said to them: We not only hear you, but we are going to step up and we are going to help. That is what this bill does. That takes away the tax liability for families. That is what we did earlier today with FHA modernization, and it is a good way to end a very hard-fought week, a very difficult, challenging week, to come together on this Friday to be able to get work done for the American people, and I am very proud we have been able to do that.

I yield the floor.

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