Illinois Attorney General: Extend tax relief to distressed homeowners

Illinois Attorney General Lisa Madigan has joined with 41 other attorneys general from around the country urging Congress to extend tax relief on mortgage forgiveness. Without an extension, the federal Mortgage Debt Relief Act will expire on Dec. 31, 2012, forcing families to pay taxes on the mortgage debt that is forgiven as a result of a loan modification, short sale, or foreclosure.

“Failure to extend this tax relief would hurt the very families we set out to help in the national foreclosure settlement,” Madigan said in a news release. “We need to do everything we can to encourage—not deter—struggling homeowners to seek help to stay in their homes.”

REALTORS® have also spoken out in favor of extending the tax relief. The National Association of REALTORS® (NAR) has issued a Call to Action to its members, urging them to contact Congress and tell them to keep the housing recovery on track by extending the tax relief.

“Over a quarter of all transactions still involve distressed properties. That is why you must take action now,” NAR said. “Homeowners shouldn’t be forced to pay a tax on money they’ve already lost with cash they never received.”

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