WASHINGTON - Congresswoman Gabrielle Giffords spoke on the floor of the House of Representatives this afternoon in support of a bipartisan bill offering permanent tax relief to struggling homeowners.
Under current law, when a family faces mortgage foreclosure, any debt forgiven or renegotiation is considered taxable income. Today, Giffords and a strong bipartisan majority of her congressional colleagues passed legislation that recognizes the efforts by the mortgage industry to work with homeowners to avoid foreclosure and stabilize the housing market. The bill also makes clear that families dealing with the pain of foreclosure should not have the double burden of a large tax bill.
The Mortgage Forgiveness Debt Relief Act passed the House in a 386-27 vote. It helps would-be homeowners secure their investments through a long-term extension of the tax deduction for private mortgage insurance and tightens requirements taxpayers must meet to exclude gain from the sale of certain homes that have been used as a vacation home or rental property.
The text of Giffords’ statement is below. To see her deliver the statment on C-SPAN click here.
Madame Speaker, I rise today in support of H.R. 3648, the Mortgage Forgiveness Debt Relief Act.
A few years ago Arizona had been a national leader in home prices. With the growing subprime mortgage crisis, Arizona is now experiencing increasing record foreclosures – in May, new foreclosures in Arizona were 141% higher just two years ago.
Some mortgage lenders are working with homeowners to adjust their mortgages to fairly reflect the decreased home values. They are adjusting their lending policies in response to the current housing market.
Congress has to do the same. We should not penalize homeowners by taxing them on their discharged debt.
This bill encourages market-based decisions – it creates fundamental tax fairness. This bill responsibly helps Arizona families avoid foreclosure and remain in their homes. Fewer foreclosures will help stabilize property values and protect our local and our regional economies.
I proudly cosponsored this bipartisan legislation that is endorsed by the National Association of Realtors, the National Association of Homebuilders, and the Mortgage Bankers Association and urge a yes vote.