H.R. 3648 Mortgage Foregivness Debt Relief Act 2007

Today, President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007, which will help Americans avoid foreclosure by protecting families from higher taxes when they refinance their home mortgages. This Act will create a three-year window for homeowners to refinance their mortgage and pay no taxes on any debt forgiveness that they receive. Under current law, if the value of your house declines, and your bank or lender forgives a portion of your mortgage, the tax code treats the amount forgiven as income that can be taxed. This Act will increase the incentive for borrowers and lenders to work together to refinance loans and allow American families to secure lower mortgage payments without facing higher taxes. Read the whole story here…Thousands of home owners were waiting for the Senate vote on HR 3648. It is the Mortgage Forgiveness Dept Relief Act of 2007. Here is a copy of the actual bill.HR 3648 Mortgage Foregiveness Debt Relief Act 2007The bill will be retroactive applying to anyone that has had mortgage dept discharged or forgiven back to January 1, 2007 from foreclosures or short sales. Congress passed the bill on October 4, 2007. It passed with votes 386 to 27. The President asked for the legislation so the Senate passed it quickly.This bill will help the insolvent homeowner from taking an addition beating on a 1099 IRS gift of their short sale or foreclosure. In the past only a bankruptcy would protect the homeowner from the taxation of a 1099 short sale or foreclosure debt.