After enduring the malarkey of last night's VP debate, which brought barely a mention of the country's ongoing housing crisis and no consideration for the millions of distressed homeowners facing their own personal 'fiscal cliff' should Congress once again fail to act, today's post focuses on the impending lame-duck congressional session and what it means for borrowers facing foreclosure.
The session is scheduled to begin on Nov. 13, thankfully seven days after what is sure to be a contentious presidential election. Though it is perhaps too optimistic to be thankful, the hope is that with the election decided, Congress may finally be able to focus on the problems at hand with an eye toward what is best for the country, rather than what makes the best political sense for each side.
The main concern for distressed borrowers will be the future of the mortgage debt forgiveness tax provisions, laws passed by Congress during the housing crisis that ensure any debts forgiven by lenders following foreclosures, loan mods, short sales or deeds-in-lieu will be written off without being taxed as income by the federal government. (State governments have passed similar laws, including California.) The central tenet of these laws, the Family and Business Tax Cut Certainty Act of 2012, passed the Senate Finance Committee in August but has a chance of being embroiled in the inevitable partisan bickering over spending cuts, taxes and the federal debt ceiling once the lame-duck session starts.
Hopefully for the millions of worried borrowers wrenching their hands at congressional intransigence, the Tax Cut Certainty Act will be treated as a stand-alone bill and the issue of debt forgiveness tax exemption will be seen for what it is: a small but significant succor for millions of Americans facing the loss of their homes, businesses and overall lifestyles.
RELATED ARTICLES:
Kenneth R. Harney, Los Angeles Times, October 7, 2012
http://articles.latimes.com/2012/oct/07/business/la-fi-harney-20121007
Carolyn Said, San Francisco Chronicle, September 17, 2012
http://www.sfgate.com/business/article/Clock-ticking-on-forgiven-debt-tax-break-3872721.php?goback=.gde_133476_member_165464841
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