Pelosi: Subprime Mortgage Bill Will Help Struggling Homeowners Facing Threat of Foreclosure

December 18, 2007

Washington, D.C. - Speaker Nancy Pelosi issued the following statement today on House passage of Senate amendments to H.R. 3648, Mortgage Forgiveness Debt Relief Act. This bipartisan bill stops the tax on 'phantom income' when a lender forgives some part of a families' mortgage in foreclosure for three years. This bill will be sent to the President for his signature.

'Today's legislation is a critical step by the New Direction Congress that helps struggling homeowners who are faced with ballooning mortgage payments and the threat of foreclosure. Under the bill, homeowners will not be hit with a tax on 'phantom income' resulting from foreclosure or renegotiation of their home loans. Families facing the loss of their homes should not face a huge tax bill to boot.

'The economy demands a stronger proposal than one announced by the Bush Administration, which is why the New Direction Congress is pressing ahead with a comprehensive agenda that will bolster our housing market, limit foreclosures, and protect families against risky loans. These measures are all the more necessary given the Federal Reserve's failure today to go far enough to protect consumers against risky subprime mortgages.

'I hope the President will sign this strong legislation and work with us to enact our comprehensive subprime strategy that goes far beyond the Administration's limited plan.'