The U.S. Senate Finance Committee has approved a bipartisan bill that would extend the Mortgage Forgiveness Debt Relief Act (MDRA) through 2013. Why is this important? Several reasons: The debt relief law spares homeowners who receive principal reductions on their mortgages from being hit with hefty federal income taxes on the amounts forgiven.
Without it, millions of homeowners who go through foreclosure or leave their homes following short sales would experience even more financial stress. The law, which is set to expire December 31, 2012, has also provided relief to thousands of people who have debt balances written off as part of loan-modification agreements and is crucial to the $25-billion federal-state robo-signing settlement with large banks.
Currently there are at least five different Congressional bills pending in the lame duck session of Congress concerning extensions to the MDRA. NAILTA recently issued a white paper in support of extensions to the MDRA. Many of our members and represented industry colleagues have handled the ever-growing number of short sale transactions that have helped homeowners avoid foreclosure and maintain the continuity of land transfers. Without the MDRA, the short sale market will collapse and foreclosures will increase putting an already strained real estate market on the way backward.
Independent title agents are still the consumers’ best friend and most trusted professional at a real estate closing. An extension of the MDRA would help millions of distressed homeowners find an alternative to bankruptcy and foreclosure. Extending MDRA will also help small business owners in the title insurance market remain competitive within the title community.
If you are in contact with your local Congressional representative, tell them you support NAILTA and would like them to vote in favor of extending the MDRA.
For more information on how you can become involved with NAILTA’s policy efforts, please contact us.