Senator Feinstein Responds to Mortgage Forgiveness Debt Relief Letter

Dear David:

Thank you for writing me to express your support for extending the mortgage debt relief provisions included in the Mortgage Forgiveness Debt Relief Act.  I appreciate hearing from you and welcome the opportunity to respond.

Please know that like you, I strongly believe the federal government must do more to help distressed homeowners and stabilize the housing market.  I supported the Mortgage Forgiveness Debt Relief Act (Public Law 110-142) when it was passed in 2007 because I believed that this tax relief would help the homeowners who had been most impacted by the housing market crash.  This legislation allows homeowners to exclude debt that is forgiven through mortgage restructuring or foreclosure from their taxable income. 

As you discuss in your letter, this tax relief is currently scheduled to expire at the end of 2012.  I understand your concerns that the expiration of this tax relief will come at a time when many homeowners are still struggling with underwater mortgages or facing foreclosure.  You may be interested to know that President Obama included the extension of this tax treatment through 2015 as a part his FY2013 budget proposal.  Additionally, I have instructed my staff to carefully examine proposals to help struggling homeowners, including the extension of the Mortgage Debt Relief Act.  I appreciate hearing of your support for this proposal and will keep your thoughts in mind as I continue to work with my colleagues to stabilize the housing market and provide relief for homeowners impacted by the recession. 

Once again, thank you for writing.  If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841.  Best regards.