12/18/15 UPDATE: Both houses of Congress voted to pass the tax package which contained a provision to re-establish the exemption from Federal Income Tax Liability for debt forgiveness related at a home mortgage loan. This exemption previously expired on December 31, 2014.
By extending this tax exemption through 2015 and 2016, Congress gives homeowners struggling to keep their homes and mortgage lenders reworking loans more options for resolving disputes. Next, the Senate is expecting to pass the bill and President Obama has committed to signing it in its current form.
Thank you to all who stood with PaytonDann in supporting this vital issue for America’s homeowners!
In the past year, PaytonDann has negotiated principal reduction loan modifications, complete debt forgiveness and waivers of deficiencies for dozens of our clients. Those clients will face the possibility of a huge tax bill as a result of these instances of debt forgiveness. Legislation that is moving in Congress this week can instantly remove that possibility.
In the midst of the financial crisis, among the forms of relief for consumer victims of the housing bubble enacted by Congress was to change the tax code to create an exemption from Federal Income Tax Liability for debt forgiveness related to a home mortgage loan.
The exemption for home mortgage debt forgiveness was extended several times but ultimately expired on December 31 of last year.
Finally, there is good news from Congress on this issue. The budget deal that was announced last night contains a provision that would extend that home mortgage debt forgiveness for 2015 and 2016. This would give clients struggling to keep their homes and mortgage lenders who want to rework loans many more options for positively resolving those disputes.
We have negotiated Principal Reductions and Deficiency Waivers for dozens of our clients in the past year who will benefit from this change. Passage of the budget bill with these provisions will make it possible to obtain more positive outcomes for homeowners facing foreclosure during 2016.
Please contact your Representative and Senators as soon as possible and let them know how important the extension of the Home Mortgage Debt Forgiveness Tax Exemption is for the continuation of our economic recovery.
To find or confirm information about your elected representatives, visit: http://www.contactingthecongress.org/