California Senate Approves Mortgage Debt Forgiveness Bill

SACRAMENTO - March 25, 2008 - The state Senate approved a bill Monday to help California homeowners whose lenders have forgiven part of their mortgage debt.

The bill would end a requirement that homeowners report that part of the loan that was forgiven as income on their tax returns.

Senator Michael Machado (D-Linden) said the bill would help in a short sale, loan modification or refinance in which part or all of the debt is forgiven.

The bill would apply only to owner-occupied homes in which the debt was forgiven this year or last. The bill now heads to the Assembly.

California Senate approves bill on mortgage debt
Associated Press