Mortgage Forgiveness Debt Relief Act of 2007

MORTGAGE FORGIVENESS DEBT RELIEF ACT OF 2007 -- (House of Representatives - October 04, 2007)

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Mr. NEAL of Massachusetts. Mr. Speaker, I thank Mr. Blumenauer for yielding the time. And I want to acknowledge Chairman Rangel and JIM MCCRERY today for the manner in which they moved this legislation and how swiftly they addressed the issue that is looming across markets here in America and has had, in fact, an international impact.

In my home State of Massachusetts, foreclosures have risen by 66 percent over the last year. Recent studies have estimated that one in five subprime mortgages from the past 2 years will result in foreclosure. That means more than 1 million homeowners will lose their opportunity to hold on to the American Dream. But even more distressing will be the tax bill if the lender is kind enough to forgive part of this debt.

We want to do all that we can to keep them in their home and to work out some arrangement to help them keep paying, even if that means forgiving a part of the tax debt. But with the tax bill looming, many might even argue that that could be counterproductive. So that's why I'm enthusiastic about supporting the legislation that's on the floor today.

This bipartisan bill, and I emphasize, the most bipartisan bill in the last 7 years on the Ways and Means committee, this bipartisan bill would change the current tax law and provide that homeowners would not be taxed on the portion of forgiven debt if due to financial hardship or decline, and I emphasize decline, in the value of the home.

It simply makes good sense to do this. The bill has been endorsed by the Realtors Association, the homebuilders, the mortgage bankers, and most importantly, members of the American family.

This is a commonsense proposal. I hope we're all going to support it.

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