The Mortgage Forgiveness Debt Relief Act Of 2007

President Bush Signs Legislation Protecting American Families

From Higher Taxes When They Refinance Their Homes

"When your home is losing value and your family is under financial stress, the last thing you need is to be hit with higher taxes. So I'm working with members of both parties to pass

a bill that will protect homeowners from having to pay taxes on cancelled mortgage debt."
─ President George W. Bush, 9/1/07

The Mortgage Forgiveness Debt Relief Act of 2007 should help Americans avoid foreclosure by protecting families from higher taxes when they refinance their home mortgages. This Act will create a three-year window for homeowners to refinance their mortgage and pay no taxes on any debt forgiveness that they receive. This Act increases the incentive for borrowers and lenders to work together to refinance loans and allows American families to secure lower mortgage payments without facing higher taxes.

HOPE NOW recently mailed hundreds of thousands of letters to borrowers falling

behind on their payments and is supporting a toll-free mortgage counseling hotline,

1-888-995 HOPE. HOPE NOW has developed a plan under which up to 1.2 million

homeowners could be eligible for assistance. The HOPE NOW plan will help subprime

borrowers who can afford the current, starter rate on a subprime loan, but would not be

able to make the higher payments once the interest rate goes up.