Stabenow Mortgage Tax Legislation Becomes Law
President Signs Stabenow Legislation Helping Families in Mortgage Crisis
U.S. Senator Debbie Stabenow (D-MI) today joined President George W. Bush at the White House, as the President signed Stabenow's mortgage tax relief legislation into law. The legislation changes 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.
"This law is critical to ensuring that families across our state who face foreclosure will not be hit with an additional tax bill this year. It adds insult to injury when someone loses their home and gets a new tax bill on top of it." said Stabenow. "I appreciate the support of the President and my Senate and House colleagues in turning my legislation into law. I look forward to continuing the critical effort to help the thousands of Michigan families faced with the prospect of losing their home."
Declining home prices and rising foreclosure rates have left too many 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 Forgiveness Debt 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 to discuss what needs to be done to help families. And as chair of the Democratic Steering and Outreach Committee, she 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.
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.
The signing ceremony took place at 1:00 pm today at the White House.