Forgive me if I slip into a cliff metaphor, but the employment of the tool actually makes more sense in this context. The fact is that the expiration of the Mortgage Forgiveness Debt Relief Act, as explained by Adam Levin of Credit.com, represents a real threat to a nascent housing recovery, because it will put a deep freeze on a very large chunk of current US home sales.
|By: David Dayen Thursday November 29, 2012 4:00 pm|
It’s not often that the homeowner advocates at the Center for Responsible Lending and the bank lobbyists at the Financial Services Roundtable agree on anything. But they’re teaming up on urging Congress to extend the Mortgage Forgiveness Debt Relief Act, which would continue the foreclosure crisis-era policy of forgiving payment of taxes on debt forgiveness like a principal reduction or a short sale.
In letters to the Senate Finance Committee and the House Ways and Means Committee, which have jurisdiction over tax law, CRL and the FSR describe the debt relief law as “critical to helping homeowners and communities struggling with the ongoing foreclosure crisis.” They also note that failing to extend the law would threaten a housing recovery.
|By: David Dayen Tuesday September 18, 2012 12:29 pm|
Here’s some good news in an otherwise dispiriting Congressional session. A Republican House member is trying to accumulate support for a bill that would extend the Mortgage Forgiveness Debt Relief Act by three years. As I’ve been reporting, a failure to extend this law would mean that all debt forgiveness, in the form of principal reductions or short sales, would be viewed for tax purposes as earned income for the borrower, leading to a giant tax bill on the phantom income.
|By: David Dayen Monday April 16, 2012 9:20 am|
Good columnists like Edward Luce are explaining some of the basics of the ongoing housing/mortgage crisis, but they’re still assuming that the decisions open to Ed DeMarco will have a greater effect than is being discussed. That’s because his decisions about principal write downs would apply only to a small part of the overall depressed housing market.
|By: David Dayen Wednesday April 11, 2012 10:10 am|
Coverage of Ed DeMarco’s speech on principal reductions has sometimes missed the point he’s talking about applying reductions to only a small subset of the underwater mortgates held by the GSEs, so the benefits of the policy are also seen as relatively small. It seems he and the Administration are focused more on interest refinancing than principal reductions.
|By: David Dayen Thursday November 4, 2010 9:45 am|
On the day after an election wipeout, Treasury Secretary Timothy Geithner sat down with a coalition of homeowner advocates, clergy and people subject to the cruelty of HAMP, the government’s loan modification program. This was the first time, to the best of the knowledge of the activists, that Geithner has ever had a face-to-face meeting with the type of people who had to deal with the program his office designed and managed.