Joe Baca: “I rise in support of H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007. Among large metro areas my district in…”

“I rise in support of H.R. 3648, the Mortgage Forgiveness Debt Relief Act of 2007. Among large metro areas my district in the Inland Empire has the fourth highest rate of foreclosure filings in the Nation and was the hardest hit area in California through the first half of 2007. In San Bernardino County alone there were 19,185 foreclosure filings during the first half of 2007, representing a staggering 345 percent increase from the previous year. Overall, there is one foreclosure filing for every 33 households in the Inland Empire. These numbers go to show that the subprime crisis we are experiencing today is not an abstract issue. These are real people who are going through painful struggles to stay in their home and keep their families together. Regrettably, when banks and loan servicers decide to help these families by forgiving a part of a loan, that debt is then treated as a source of income which in turn makes the forgiven amount subject to tax. Families who are already facing foreclosure should not have to face the additional burden of paying tax on phantom income. This bill restores fairness for homeowners who are financially and economically distressed by eliminating that requirement. It will play a central role in helping American families avoid foreclosure and stay in their homes and I urge my colleagues to support it.”