Call for Action: Keep the Housing Recovery on Track

Despite some positive signs of recovery, our nation’s real estate market is still fragile.  Over a quarter of all transactions still involve a distressed property.  That’s why you must take action now and tell Congress to extend Mortgage Forgiveness Tax Relief.

Without an extension, families engaged in a loan modification, short sale, or foreclosure would face a big tax bill. Neither consumers nor the housing market need that added burden.  Homeowners shouldn’t be forced to pay a tax on money they’ve already lost with cash they never received.

Please tell Congress to extend Mortgage Forgiveness Tax Relief. We need no new obstacles that might throw the housing recovery off track.

Message Subject: REALTORS Urge Your Support for S. 2250, H.R. 4336 and H.R. 4202

Dear [Decision Maker],

As a REALTOR®, I know first-hand the effects the struggling housing market has had on our nation’s families and communities. While some housing markets are moving in the right direction, others will take years to fully recover from the loss in value caused by the Great Recession.
It’s important that Congress not add any roadblocks to a full and robust recovery. That’s why I’m asking you to support an immediate extension of “The Mortgage Forgiveness Debt Relief Act.”

Without action before the end of the year, millions of families who hold “distressed properties” could face a tax penalty if they try to modify their mortgage or seek a short sale through their lender. Even those in the worst situation facing foreclosure would find themselves forced to pay a “foreclosure tax” if Congress doesn’t act. This is because the amount of debt forgiven by the lender would be considered “phantom income” to the borrower even though they never receive any payment from the lender.
No taxpayer should be forced to pay tax on money they’ve already lost with cash they never received.
Today’s distressed sales and restructurings come not as a result of bad loans or over-leveraged families but from a struggling economy and falling home prices. We should be doing everything we can to expedite responsible loan modifications and short sales to allow the housing market and our economy to fully recover.

Legislation has been introduced in both the House and Senate. I urge you to ask your party leaders to work together to move a tax extenders package to the floor, before the end of the year, that includes this important provision.

Sincerely,

What’s-at-Stake:

• Mortgage Forgiveness Tax Relief could affect almost one quarter of all real estate transactions.
• Homeowners shouldn’t be forced to pay tax on money they’ve already lost with cash they never received – and never will receive.
• More than 20% of current homeowners with a mortgage owe more on their homes than the current fair market value.
• Transactions not completed by year-end could become taxable in 2013, despite a borrower’s reliance on this tax relief.
• The housing market, while recovering, is still fragile enough that this tax relief will be needed in 2013 and possibly beyond.