The passage of a bill that would temporarily re-establish mortgage-forgiveness tax-relief is one of the National Association of Realtors' "highest priorities" for the year, the group said Tuesday.
NAR in a letter to the Senate pushed for the passage of S. 122, the Mortgage Debt Tax Relief Act, a bill introduced by Senate Finance Committee Members Dean Heller, R-Nev.; Debbie Stabenow, D-Mich.; Johnny Isakson, R-Ga.; and Bob Menendez, D-N.J. The bill would extend the relief for two years.
"A decade after the housing crash that led to the Great Recession, there are still far too many homeowners who find themselves in foreclosure, completing a loan sale or attempting to have an existing loan restructured," said NAR President William Brown in the letter.
Over 6% or more than 3.2 million homeowners still have mortgages that outweigh the value of their homes and almost 600,000 homes are in the foreclosure process in the U.S., the letter notes, citing CoreLogic and Mortgage Bankers Association estimates, respectively.
The original Mortgage Forgiveness Tax Relief Act of 2007 that expired this year dates back to the outset of the housing crash and had been extended multiple times.
Without the conditional relief, the homeowner debt that lenders forgive is considered taxable income.
NAR late last year had opposed other proposals that would have marginalized tax incentives for homeownership.