Congressman Dennis Cardoza
18th Congressional District of California

 

Under current law, debt forgiven following mortgage foreclosure or renegotiation is considered income for tax purposes, resulting in tax liability for individuals and families. This bill provides tax relief to families by excluding debt forgiven under these circumstances from tax liability for the next three years.  It is estimated that two million American families could lose their homes to foreclosure due to rising interest rates in the current housing market crisis.

 

“Sadly, I represent communities that have been dubbed ‘foreclosure capitol USA’ by the national media because of foreclosure rates around 1 in 27 homes in some places,” said Cardoza. “This bill is one part of an aggressive response to the foreclosure crisis by the federal government. I expect Congress to pass further measures next year that will provide common sense relief to homeowners facing foreclosure.”

 

San Joaquin, Stanislaus, and Merced Counties in California have been particularly hard hit by the foreclosure crisis. RealtyTrac, which monitors foreclosure rates across the U.S., calculated that foreclosure notices went to 1-in-79 homes in Stanislaus County, 1-in-81 homes in San Joaquin County and 1-in-82 homes in Merced County. The national foreclosure notice rate was 1-in-510 homes and 1-in-224 homes throughout California.

On December 1, 2007 Congressman Cardoza sponsored a foreclosure workshop in Stockton which offered free, confidential advice to families facing foreclosure or worried about making their mortgage payments. The event was attended by over 500 families and individuals. 

H.R. 3648 has received strong support from the housing and mortgage industries, including the National Association of Realtors, Mortgage Bankers Association and National Association of Homebuilders.