The Mortgage Forgiveness Debt Relief Act Has Expired. Renewal Could Benefit Millions.

Brief

The Mortgage Forgiveness Debt Relief Act Has Expired. Renewal Could Benefit Millions.

February 14, 2014

Abstract

At year end 2013 the Mortgage Forgiveness Debt Relief Act expired. Unless Congress extends it, debt on principal residences that has been forgiven or written down after 2013through short sales, deeds-in-lieu, foreclosures or loan modifications will generally be treated as taxable income. We argue that the act is an important facilitator of principal-reduction modifications. Failure to renew is likely to generate little net revenue.

Research Area: 

Centers

To reuse content from Urban Institute, visit copyright.com, search for the publications, choose from a list of licenses, and complete the transaction.

LATEST IN Housing and Housing Finance

To reuse content from Urban Institute, visit copyright.com, search for the publications, choose from a list of licenses, and complete the transaction.