The National Association of REALTORS® (NAR) is urging REALTORS® to contact their representatives in Congress and tell them to extend the Mortgage Forgiveness Tax Relief. The Silicon Valley Association of REALTORS® (SILVAR) is asking its members to answer NAR’s Call for Action because it is crucial to the continuation of a housing recovery that Congress extend this tax relief to distressed homeowners.

If Congress does not extend the Mortgage Forgiveness Debt Relief Act of 2007 by the end of this year, homeowners will have to pay income tax on the portion of their mortgage that is forgiven in a foreclosure, short sale or principal reduction. Homeowners should not be forced to pay a tax on money they have already lost with cash they never received. 

Despite many positive signs of recovery, the U.S. real estate market is still fragile. Over a quarter of all transactions still involve distressed properties. Without an extension, families engaged in loan modifications, short sales, or foreclosures will face a big tax bill, according to NAR.

The Issue Brief about the Mortgage Cancellation Tax Relief NAR has produced will provide more information on why it is important for Congress to extend the tax relief as soon as possible.