The Mortgage Debt Relief Act, which was to expire on December 31 of this year, received enough votes for extension on August 2.
Benefits in extending the relief act effect homeowners who have recently been granted principle reductions on their mortgage, or that have or will foreclose/shortsale on their homes. Under the Mortgage Debt Relief Act (MDRA) such homeowners will no longer be held accountable for the large sum of income taxes that would normally be expected on the remaining balance of funds. For example, if the value of a home is $100,000 lower than a homeowners original purchase price the homeowner was still taxed on that $100,000. Under the MDRA, the loss is forgiven and non-taxable.
Extending this bill will allow homeowners such a benefit through 2013.