Nationwide Appeal for Extension of Debt Relief Act

Florida Attorney General Pam Bondi joined 43 state attorneys general all over the country in asking the United States Congress to extend the Mortgage Debt Relief Act which is set to expire this December 31.


Passed in 2007, the Mortgage Debt Relief Act grants homeowners relief from being taxed on the amount of money lenders forgive in a short sale or foreclosure. Unless it is extended, homeowners who complete short sales or foreclosures on primary residences next year and beyond would already be receiving tax bills from the Internal Revenue Service for the completed transaction.

Housing analysts are optimistic that the debt relief law will be extended now that the presidential election is over. The critical issue though is when the lawmakers would take the action since year end is fast approaching. An extension is included in the Family and Business Tax Cut Certainty Act of 2012 (S.3521), which recently passed out of the Senate Finance Committee with bipartisan support.

Attorney General Bondi in a statement said, “We are urging Congress to protect distressed homeowners who qualify for mortgage relief from encountering an unexpected tax bill from the IRS. This tax relief is critical in helping Floridians keep their homes and get back on their feet.”