Senator Gregg Offers Mortgage Forgiveness Amendment to Farm Bill
Washington, DC – December 12, 2007 – Senator Judd Gregg, ranking member of the Senate Budget Committee, has offered an amendment to the 2007 Farm Bill that will help millions of American homeowners hurt by the downturn in the housing market. Senator Gregg had filed the amendment in mid-November.
“It is a terrible and traumatic experience to lose your home,” said Senator Gregg. “The downturn in the housing market is negatively impacting millions of homeowners, and foreclosures are rising dramatically. As lenders and homeowners attempt to work out alternative payment plans to avoid foreclosure, it is utterly inappropriate for the government to profit from this situation. The last thing a distressed homeowner needs after months of legal wrangling is an additional tax bill from the IRS.”
As home prices and home sales have dropped precipitously across the country, more than 600,000 U.S. homes are currently in foreclosure and more than 3 million Americans are currently behind on their mortgage payments. Senator Gregg’s amendment, which is co-sponsored by Senators John Sununu (R-NH) and Wayne Allard (R-CO), encourages individuals and their lenders to negotiate a solution to avoid additional foreclosures by offering temporary tax relief.
The Gregg amendment would permit any homeowner who obtained a mortgage before January 1, 2007 to receive mortgage forgiveness from their lender, tax free. The amendment also would cover restructured mortgage agreements entered into after January 1, 2007 and before December 31, 2009. The tax forgiveness would be available on mortgage indebtedness of up to $1 million.