Since 2007, the Mortgage Forgiveness Tax Relief Act has protected many homeowners from owing taxes on forgiven portions of mortgage debt.  The law expired at the end of 2013 and Congress has so far failed to extend it. Without swift action to renew the law, homeowners receiving mortgage modifications that reduce the principal balance of their loans could end up owing taxes on the mortgage debt that is reduced. The longer Congress waits to act, the more homeowners will hesitate to accept such home-saving loan modifications out of fear of taking on an unaffordable tax burden.

Tell your congressional representative to support the Mortgage Forgiveness Tax Relief Act (HR 2994), and to sign on as a co-sponsor if they have not already done so.

New settlement agreements with JP Morgan Chase and Ocwen promise increased numbers of people getting principal reduction, which is very good news. But that makes it even more important to keep this tax provision in place. Settlements like this one, put in place to provide modifications with principal reduction for qualified homeowners, should not end up penalizing families who have waited years for relief by making them pay taxes on the forgiven debt.

Tell Congress to bring this bill to the floor as soon as possible.

HR 2994 has bipartisan support. Congress must act quickly to keep taxes from rising on American families who qualify for principal reduction on their mortgages, under these settlements or otherwise. For many homeowners, principal reduction may be the only way for them to keep paying their mortgages and save their homes. Please ask your member of Congress to support this important legislation, and to do everything possible to get it enacted immediately.