Mortgage Cancellation Tax Relief Act introduced

The Monmouth County Association of Realtors applauds New Jersey's Rep. Robert E. Andrews (D-1st District) for introducing the Mortgage Cancellation Tax Relief Act. This federal legislation is important to many New Jersey homeowners who are going through the difficult process of foreclosure.

Under current law, when a lender forgives some or all of a mortgage debt, the borrower is required to treat the forgiven debt as taxable income. This legislation would assure borrowers that they would incur no income tax liability when a lender forgives some portion of a mortgage in the event of a "short" sale or foreclosure.

Usually, when a home goes into foreclosure, it is a direct result of the homeowner's inability to afford the mortgage. Despite being forgiven for the loan, being taxed on that money only creates an additional hardship. This legislation being sponsored by Congressman Andrews would eliminate the problem.

Ellen W. Kale

president

Monmouth County Association

of Realtors