Attention in the commercial real estate industry is turning to efforts in Congress to pass another extension of the Mortgage Forgiveness Debt Relief Act of 2007. Besides continuing the fuel the housing market, some proponents of the extension also say it could buttress the GSEs efforts to promote debt relief--especially if and when a new director of the Federal Housing Finance Agency is confirmed. (GlobeSt.com)
First, though, a brief look at the MFDRA. The act exempts homeowners from having to pay taxes on mortgage debt that is forgiven, usually via a short sale or loan modification. Otherwise, the forgiven debt is taxed as income. Three bills have been introduced to extend the measure, and according to The Hill, they are garnering bipartisan support. They face an uphill climb, though, as time is running out for this legislative year and most of Congress' efforts are going to hammering out a budget deal. That said, there is a possibility something could pass, David Johnson, president of Strategic Vision, tells GlobeSt.com. "It is a good issue to run on in the election – that is half of why it is being proposed."