Judd Gregg: “I support this FHA initiative. As the Senator from New Jersey so appropriately noted, this is another tool which is…”

“I support this FHA initiative. As the Senator from New Jersey so appropriately noted, this is another tool which is absolutely critical in this area, as is an amendment which I have pending to the farm bill which, regrettably, as a result of last night's cloture motion, will be ruled nongermane and therefore will not be allowed to be brought up. This amendment says essentially that if a person's home is foreclosed on, they don't then get hit with an IRS tax lien for the amount of the foreclosure which is not recovered. In other words, if you own a home and, regrettably, you can't meet your payments because of a subprime event, and your loan was, say, $100,000, and they foreclose, take it away from you, and then they sell your home but they don't get $100,000--let's say they get $50,000 of that loan paid--you get hit with a tax bill for the additional $50,000. Or if there is a restructuring, where the lenders actually rewrite your loan so you can make your payments, and that represents a writedown in the value of the loan, you get hit with a tax bill. So the irony of the event is, it is pretty devastating to people. First, their home gets taken. Then the IRS agent shows up and gives them a tax bill and hits them with a tax lien. That, obviously, is not fair, and it is not appropriate. It is a quirk of our Internal Revenue law. This amendment would eliminate that. It would eliminate that event. I do think it is important.…”