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Dear Mr. Sethi:
Thank you for writing me to express your support for extending the mortgage debt relief provisions included in the Mortgage Forgiveness Debt Relief Act. I appreciate hearing from you and welcome the opportunity to respond.
Please know that like you, I strongly believe the federal government must do more to help distressed homeowners and stabilize the housing market. I supported the Mortgage Forgiveness Debt Relief Act (Public Law 110-142) when it was passed in 2007. I also supported the most recent extension of this relief in 2012. This tax provision allows homeowners to exclude from taxation debt that is forgiven through mortgage restructuring, short sale, or foreclosure. I have consistently supported this relief because I believe it has stabilized the housing market and helped homeowners who have been most impacted by the housing market crash.
As you may know, this tax relief expired on January 1, 2014. This means that under current law, mortgage debt that was forgiven on December 31, 2013 will qualify for relief, while debt forgiven on January 1, 2014 or after will not. I understand your concerns that the expiration of this tax relief comes at a time when many homeowners are still struggling with underwater mortgages or facing foreclosure. Please know that if the extension of the Mortgage Debt Relief Act comes before me in the Senate, I will be mindful of the continuing struggles of homeowners as I was when I supported earlier extensions of this debt relief.
Once again, thank you for writing. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
- Sunil Sethi
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