Mortgage Debt Relief Legislation on the Way?

Congress is reportedly seriously considering a bipartisan bill hat would extend the mortgage debt relief safe harbor for eligible homeowners through 2015 and all of 2016.

Currently, if a lender forgives mortgage debt as part of a loan modification or other arrangement, that amount will be treated by the IRS as ordinary income and taxed accordingly which can easily run into tens of thousands of dollars.

The Mortgage Forgiveness Debt Relief Act, passed last year, only helped homeowners who received write-offs during 2014.

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