Earl Pomeroy: “75 million American households own their home. About 68 percent of these homeowners have a mortgage, and about 26…”

“75 million American households own their home. About 68 percent of these homeowners have a mortgage, and about 26 percent of those also carry a second mortgage, a home equity line, or both. In total, Americans have about $10.4 trillion of mortgage debt outstanding. The large majority of families are paying their mortgage payments on time, but many families are having a difficult time meeting their monthly mortgage payments as the interest rates on their loans are being reset to higher levels. Missed payments can mean high added fees also apply. In this last year, more families have found that they just can not keep up and end up loosing their home in foreclosure. Both foreclosures and their precursor, delinquencies, shot upward. By August 2007, foreclosures were up 115 percent from last year, and up 36 percent from July. Since economic research shows that a single foreclosure within a city block lowers the value of homes in the area by 0.9 percent, many lenders want to help families stay in their homes. These families work out a new loan with their lender revising the home loans by forgiving some of the debt caused by the decline in housing prices. The last thing these families need is a tax bill for the ``phantom income'' arising from the loss in the value of their home or the amount of debt forgiveness. Today, Congress rips up that tax bill for struggling families as we pass the Mortgage Forgiveness Debt Relief Act of 2007.”