Congressional Record, Volume 153 Issue 194 (Tuesday, December 18, 2007)

[Congressional Record Volume 153, Number 194 (Tuesday, December 18, 2007)]
[House]
[Pages H16768-H16772]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

MORTGAGE FORGIVENESS DEBT RELIEF ACT OF 2007

Mrs. JONES of Ohio. Mr. Speaker, I move to suspend the rules and
concur in the Senate amendment to the bill (H.R. 3648) to amend the
Internal Revenue Code of 1986 to exclude discharges of indebtedness on
principal residences from gross income, and for other purposes.
The Clerk read the title of the bill.
The text of the Senate amendment is as follows:

Senate amendment:
Strike out all after the enacting clause and insert:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Mortgage Forgiveness Debt
Relief Act of 2007''.

SEC. 2. DISCHARGES OF INDEBTEDNESS ON PRINCIPAL RESIDENCE
EXCLUDED FROM GROSS INCOME.

(a) In General.--Paragraph (1) of section 108(a) of the
Internal Revenue Code of 1986 is amended by striking ``or''
at the end of subparagraph (C), by striking the period at the
end of subparagraph (D) and inserting ``, or'', and by
inserting after subparagraph (D) the following new
subparagraph:
``(E) the indebtedness discharged is qualified principal
residence indebtedness which is discharged before January 1,
2010.''.
(b) Special Rules Relating to Qualified Principal Residence
Indebtedness.--Section 108 of such Code is amended by adding
at the end the following new subsection:
``(h) Special Rules Relating to Qualified Principal
Residence Indebtedness.--
``(1) Basis reduction.--The amount excluded from gross
income by reason of subsection (a)(1)(E) shall be applied to
reduce (but not below zero) the basis of the principal
residence of the taxpayer.
``(2) Qualified principal residence indebtedness.--For
purposes of this section, the term `qualified principal
residence indebtedness' means acquisition indebtedness
(within the meaning of section 163(h)(3)(B), applied by
substituting `$2,000,000 ($1,000,000' for `$1,000,000
($500,000' in clause (ii) thereof) with respect to the
principal residence of the taxpayer.
``(3) Exception for certain discharges not related to
taxpayer's financial condition.--Subsection (a)(1)(E) shall
not apply to the discharge of a loan if the discharge is on
account of services performed for the lender or any other
factor not directly related to a decline in the value of the
residence or to the financial condition of the taxpayer.
``(4) Ordering rule.--If any loan is discharged, in whole
or in part, and only a portion of such loan is qualified
principal residence indebtedness, subsection (a)(1)(E) shall
apply only to so much of the amount discharged as exceeds the
amount of the loan (as determined immediately before such
discharge) which is not qualified principal residence
indebtedness.
``(5) Principal residence.--For purposes of this
subsection, the term `principal residence' has the same
meaning as when used in section 121.''.
(c) Coordination.--
(1) Subparagraph (A) of section 108(a)(2) of such Code is
amended by striking ``and (D)'' and inserting ``(D), and
(E)''.
(2) Paragraph (2) of section 108(a) of such Code is amended
by adding at the end the following new subparagraph:

[[Page H16769]]

``(C) Principal residence exclusion takes precedence over
insolvency exclusion unless elected otherwise.--Paragraph
(1)(B) shall not apply to a discharge to which paragraph
(1)(E) applies unless the taxpayer elects to apply paragraph
(1)(B) in lieu of paragraph (1)(E).''.
(d) Effective Date.--The amendments made by this section
shall apply to discharges of indebtedness on or after January
1, 2007.

SEC. 3. EXTENSION OF TREATMENT OF MORTGAGE INSURANCE PREMIUMS
AS INTEREST.

(a) In General.--Subclause (I) of section 163(h)(3)(E)(iv)
of the Internal Revenue Code of 1986 (relating to
termination) is amended by striking ``December 31, 2007'' and
inserting ``December 31, 2010''.
(b) Effective Date.--The amendment made by this section
shall apply to amounts paid or accrued after December 31,
2007.

SEC. 4. ALTERNATIVE TESTS FOR QUALIFYING AS COOPERATIVE
HOUSING CORPORATION.

(a) In General.--Subparagraph (D) of section 216(b)(1) of
the Internal Revenue Code of 1986 (defining cooperative
housing corporation) is amended to read as follows:
``(D) meeting 1 or more of the following requirements for
the taxable year in which the taxes and interest described in
subsection (a) are paid or incurred:
``(i) 80 percent or more of the corporation's gross income
for such taxable year is derived from tenant-stockholders.
``(ii) At all times during such taxable year, 80 percent or
more of the total square footage of the corporation's
property is used or available for use by the tenant-
stockholders for residential purposes or purposes ancillary
to such residential use.
``(iii) 90 percent or more of the expenditures of the
corporation paid or incurred during such taxable year are
paid or incurred for the acquisition, construction,
management, maintenance, or care of the corporation's
property for the benefit of the tenant-stockholders.''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years ending after the date of the
enactment of this Act.

SEC. 5. EXCLUSION FROM INCOME FOR BENEFITS PROVIDED TO
VOLUNTEER FIREFIGHTERS AND EMERGENCY MEDICAL
RESPONDERS.

(a) In General.--Part III of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to items
specifically excluded from gross income) is amended by
inserting after section 139A the following new section:

``SEC. 139B. BENEFITS PROVIDED TO VOLUNTEER FIREFIGHTERS AND
EMERGENCY MEDICAL RESPONDERS.

``(a) In General.--In the case of any member of a qualified
volunteer emergency response organization, gross income shall
not include--
``(1) any qualified State and local tax benefit, and
``(2) any qualified payment.
``(b) Denial of Double Benefits.--In the case of any member
of a qualified volunteer emergency response organization--
``(1) the deduction under 164 shall be determined with
regard to any qualified State and local tax benefit, and
``(2) expenses paid or incurred by the taxpayer in
connection with the performance of services as such a member
shall be taken into account under section 170 only to the
extent such expenses exceed the amount of any qualified
payment excluded from gross income under subsection (a).
``(c) Definitions.--For purposes of this section--
``(1) Qualified state and local tax benefit.--The term
`qualified state and local tax benefit' means any reduction
or rebate of a tax described in paragraph (1), (2), or (3) of
section 164(a) provided by a State or political division
thereof on account of services performed as a member of a
qualified volunteer emergency response organization.
``(2) Qualified payment.--
``(A) In general.--The term `qualified payment' means any
payment (whether reimbursement or otherwise) provided by a
State or political division thereof on account of the
performance of services as a member of a qualified volunteer
emergency response organization.
``(B) Applicable dollar limitation.--The amount determined
under subparagraph (A) for any taxable year shall not exceed
$30 multiplied by the number of months during such year that
the taxpayer performs such services.
``(3) Qualified volunteer emergency response
organization.--The term `qualified volunteer emergency
response organization' means any volunteer organization--
``(A) which is organized and operated to provide
firefighting or emergency medical services for persons in the
State or political subdivision, as the case may be, and
``(B) which is required (by written agreement) by the State
or political subdivision to furnish firefighting or emergency
medical services in such State or political subdivision.
``(d) Termination.--This section shall not apply with
respect to taxable years beginning after December 31,
2010.''.
(b) Clerical Amendment.--The table of sections for such
part is amended by inserting after the item relating to
section 139A the following new item:

``Sec. 139B. Benefits provided to volunteer firefighters and emergency
medical responders.''.

SEC. 6. CLARIFICATION OF STUDENT HOUSING ELIGIBLE FOR LOW-
INCOME HOUSING CREDIT.

(a) In General.--Subclause (I) of section 42(i)(3)(D)(ii)
of the Internal Revenue Code of 1986 (relating to certain
students not to disqualify unit) is amended to read as
follows:

``(I) single parents and their children and such parents
are not dependents (as defined in section 152, determined
without regard to subsections (b)(1), (b)(2), and (d)(1)(B)
thereof) of another individual and such children are not
dependents (as so defined) of another individual other than a
parent of such children, or.''

(b) Effective Date.--The amendment made by this section
shall apply to--
(1) housing credit amounts allocated before, on, or after
the date of the enactment of this Act, and
(2) buildings placed in service before, on, or after such
date to the extent paragraph (1) of section 42(h) of the
Internal Revenue Code of 1986 does not apply to any building
by reason of paragraph (4) thereof.

SEC. 7. APPLICATION OF JOINT RETURN LIMITATION FOR CAPITAL
GAINS EXCLUSION TO CERTAIN POST-MARRIAGE SALES
OF PRINCIPAL RESIDENCES BY SURVIVING SPOUSES.

(a) Sale Within 2 Years of Spouse's Death.--Section 121(b)
of the Internal Revenue Code of 1986 (relating to
limitations) is amended by adding at the end the following
new paragraph:
``(4) Special rule for certain sales by surviving
spouses.--In the case of a sale or exchange of property by an
unmarried individual whose spouse is deceased on the date of
such sale, paragraph (1) shall be applied by substituting
`$500,000' for `$250,000' if such sale occurs not later than
2 years after the date of death of such spouse and the
requirements of paragraph (2)(A) were met immediately before
such date of death.''.
(b) Effective Date.--The amendment made by this section
shall apply to sales or exchanges after December 31, 2007.

SEC. 8. MODIFICATION OF PENALTY FOR FAILURE TO FILE
PARTNERSHIP RETURNS; LIMITATION ON DISCLOSURE.

(a) Extension of Time Limitation.--Section 6698(a) of the
Internal Revenue Code of 1986 (relating to failure to file
partnership returns) is amended by striking ``5 months'' and
inserting ``12 months''.
(b) Increase in Penalty Amount.--Paragraph (1) of section
6698(b) of such Code is amended by striking ``$50'' and
inserting ``$85''.
(c) Limitation on Disclosure of Taxpayer Returns to
Partners, S Corporation Shareholders, Trust Beneficiaries,
and Estate Beneficiaries.--
(1) In general.--Section 6103(e) of such Code (relating to
disclosure to persons having material interest) is amended by
adding at the end the following new paragraph:
``(10) Limitation on certain disclosures under this
subsection.--In the case of an inspection or disclosure under
this subsection relating to the return of a partnership, S
corporation, trust, or an estate, the information inspected
or disclosed shall not include any supporting schedule,
attachment, or list which includes the taxpayer identity
information of a person other than the entity making the
return or the person conducting the inspection or to whom the
disclosure is made.''.
(2) Effective date.--The amendment made by this subsection
shall take effect on the date of the enactment of this Act.
(d) Effective Date.--The amendments made by subsections (a)
and (b) shall apply to returns required to be filed after the
date of the enactment of this Act.

SEC. 9. PENALTY FOR FAILURE TO FILE S CORPORATION RETURNS.

(a) In General.--Part I of subchapter B of chapter 68 of
the Internal Revenue Code of 1986 (relating to assessable
penalties) is amended by adding at the end the following new
section:

``SEC. 6699. FAILURE TO FILE S CORPORATION RETURN.

``(a) General Rule.--In addition to the penalty imposed by
section 7203 (relating to willful failure to file return,
supply information, or pay tax), if any S corporation
required to file a return under section 6037 for any taxable
year--
``(1) fails to file such return at the time prescribed
therefor (determined with regard to any extension of time for
filing), or
``(2) files a return which fails to show the information
required under section 6037,
such S corporation shall be liable for a penalty determined
under subsection (b) for each month (or fraction thereof)
during which such failure continues (but not to exceed 12
months), unless it is shown that such failure is due to
reasonable cause.
``(b) Amount Per Month.--For purposes of subsection (a),
the amount determined under this subsection for any month is
the product of--
``(1) $85, multiplied by
``(2) the number of persons who were shareholders in the S
corporation during any part of the taxable year.
``(c) Assessment of Penalty.--The penalty imposed by
subsection (a) shall be assessed against the S corporation.
``(d) Deficiency Procedures Not To Apply.--Subchapter B of
chapter 63 (relating to deficiency procedures for income,
estate, gift, and certain excise taxes) shall not apply in
respect of the assessment or collection of any penalty
imposed by subsection (a).''.
(b) Clerical Amendment.--The table of sections for part I
of subchapter B of chapter 68 of such Code is amended by
adding at the end the following new item:

``Sec. 6699. Failure to file S corporation return.''.

(c) Effective Date.--The amendments made by this section
shall apply to returns required to be filed after the date of
the enactment of this Act.

[[Page H16770]]

SEC. 10. MODIFICATION OF REQUIRED INSTALLMENT OF CORPORATE
ESTIMATED TAXES WITH RESPECT TO CERTAIN DATES.

The percentage under subparagraph (B) of section 401(1) of
the Tax Increase Prevention and Reconciliation Act of 2005 in
effect on the date of the enactment of this Act is increased
by 1.50 percentage points.
The SPEAKER pro tempore (Mr. Snyder). Pursuant to the rule, the
gentlewoman from Ohio (Mrs. Jones) and the gentleman from Kentucky (Mr.
Lewis) each will control 20 minutes.
The Chair recognizes the gentlewoman from Ohio.

{time} 1600

Mrs. JONES of Ohio. Mr. Speaker, I yield myself such time as I may
consume.
I am happy that the Congress is doing its part today to alleviate the
pressure Americans all over the country are feeling due to the subprime
mortgage crisis. It is estimated that before this housing slump is
over, almost 2 million homeowners will lose their homes due to
skyrocketing interest rates on their mortgages.
In September of this year, the House passed the Mortgage Relief Debt
Forgiveness Act of 2007 without controversy. The Members of the House
agreed on a bipartisan basis that this relief is necessary to give
homeowners peace of mind as they navigate the current difficulties in
the housing market. The Senate amendment to this bill further
demonstrates Congress's support for this relief.
Many Americans are getting hit by the double whammy of, one, losing
their homes to foreclosure and, two, getting slapped with a tax bill
when the debt on their home is discharged by the lender. In situations
where a lender forgives outstanding debt, it is considered income and,
thus, is taxable.
I believe that our Tax Code, above all, should promote fairness and
equity. Under current law, if your House is under foreclosure and the
bank discharges your debt, you receive a tax bill. I don't think that's
fair or equitable. It doesn't seem right for individuals in this
circumstance to face a tax bill when they really have no increase in
their net worth. As I see it, their house went down in value, and the
individuals couldn't meet their current requirements, resulting in
foreclosure. The resolution we consider today rectifies that disconnect
so that if a person's principal residence lost value, that loss won't
give rise to a tax liability. The provision would sunset in 3 years.
In addition, H.R. 3648, as amended, would provide a 3-year extension
of the deduction for private mortgage insurance. The deduction makes it
easier for homebuyers to avoid having to take out a risky high-interest
second loan in order to make a down payment.
Finally, the bill includes provisions to make it easier for taxpayers
to form housing cooperation corporations.
I hope this whole House can join the Ways and Means Committee members
in strong support of this resolution. H.R. 3648 restores some fairness
to the Tax Code by preventing the unexpected tax consequences of
foreclosure from hurting homeowners already smarting from the loss of
their homes. Passage today will direct this bill to the President's
desk and clear the path for this important legislation to become law.
Mr. Speaker, I reserve the balance of my time.
Mr. LEWIS of Kentucky. Mr. Speaker, I yield myself as much time as I
may consume.
I rise today in strong support of the Mortgage Forgiveness Debt
Relief Act of 2007. I've heard concerns from many homeowners in my
district about the serious situation in the mortgage market. These
declining prices have led some families to sell their homes for less
than they paid.
On August 31, President Bush spoke from the Rose Garden and called on
Congress to address the crisis in the mortgage market. Included in the
President's priorities was a bill that Congressman Rob Andrews and I
introduced in April. Our legislation would relieve tax obligations on
those who sell homes that have lost equity and had been forgiven a
portion of outstanding mortgage debt. Our measure is the cornerstone of
the larger bipartisan bill that we are considering here today.
Under current law, only two categories of individuals pay taxes when
selling their principal residence: those who have been able to realize
a capital gain of more than $250,000, or $500,000 on a joint return,
and those who lose the equity in their home and are forced to pay taxes
if the lender forgives some portion of the mortgage debt.
It is unfair to tax people on phantom income, particularly when they
have suffered serious economic loss and have less ability to pay the
tax. The Mortgage Forgiveness Debt Relief Act would relieve this tax
burden. The Andrews-Lewis provision states that no tax will be
collected when a lender forgives part of the mortgage on the sale or
disposition of a principal residence. This proposal has earned the
support of the National Association of Home Builders, the National
Association of Realtors and the United States Department of the
Treasury.
Addressing this Tax Code inequity and other long-term issues in the
housing market goes to the core of our national economic stability.
Today, we advance a bill to the President that seeks to calm financial
markets, aid local communities, and support one of our most basic
American aspirations: homeownership.
I would like to thank my colleague Congressman Andrews for his
commitment to this issue. I also appreciate the time and effort of my
chairman, Congressman Rangel, Ranking Member McCrery and their staffs
for moving this important measure to the House floor.
The bill before us is a good first step toward addressing the
mortgage situation. But more importantly, this bill is an example of
what happens when both parties work together to produce good policy
that will benefit millions of Americans.
Mr. Speaker, I reserve the balance of my time.
Mrs. JONES of Ohio. Mr. Speaker, I want to thank our Chair, Mr.
Rangel, and our ranking member for the hard work that they've done on
this legislation.
It gives me great pleasure to yield 2 minutes to the gentleman from
Michigan (Mr. Levin).
(Mr. LEVIN asked and was given permission to revise and extend his
remarks.)
Mr. LEVIN. Thank you to my friend from Ohio for yielding.
Bills that come up on suspension are often thought to be of less
importance. That surely is not true here today. Tax equity has been a
major principle in our efforts this year. And this legislation is an
important aspect of that, a response to the subprime mortgage crisis.
The data just released by Fannie Mae show that our State of Michigan
leads the Nation in losses on bad mortgages. Other rankings have
Michigan at second in the Nation in delinquencies and third in
foreclosure inventory. Ohio is next in some respects, but many States,
really, all States show immense numbers of people who are suffering.
And nothing would seem more unfair than when someone loses their home
to a foreclosure, if the bank sells their house for less than they owe,
the IRS says ``pay taxes,'' and this remedies it. Also, as mentioned,
this bill provides a 3-year extension of the deduction for mortgage
insurance premiums, another vital part of this legislation.
By leveling the playing field among mortgage products, we will make
homeownership more affordable, especially at a time when so-called
``piggy back'' loans are becoming more expensive, and in some cases
difficult, to obtain at any price.
And I close with this remark, ``we pay for it.'' We pay for it.
That's also been an important principle, tax equity, but not deepening
the hole of fiscal irresponsibility. And this bill lives up to both,
equity and fiscal responsibility, and we're proud to support it.
Mr. LEWIS of Kentucky. Mr. Speaker, I yield 2 minutes to my good
friend from Texas, Sam Johnson.
Mr. SAM JOHNSON of Texas. Mr. Speaker, I rise in strong support of
the Mortgage Forgiveness Debt Relief Act. I've said it before and I'm
saying it again, the current problems with the mortgage and real estate
markets are considerable, but they're not permanent. This bill finally
gets it right and provides a 3-year window so that lenders can
restructure and write down loans, allowing people to move on with their
lives without being taxed on phantom income.
I have confidence in the American economy and in the fact that real
estate markets will rebound. Our economy is sound. The Federal Reserve
is

[[Page H16771]]

now addressing mortgage lending practices that were out of control. And
it's appropriate to restructure loans without taxing phantom income
from the forgiveness of these inappropriate loans.
I am also glad to see this bill does not impose a luxury tax on one
in 20 American families who own a second home. That tax on second homes
also would have been an economic disaster for communities that rely
upon tourism and recreation as their development strategy.
This bill before us is an appropriate response to a painful but
temporary problem. We should all vote ``yes'' on this issue.
Mrs. JONES of Ohio. Mr. Speaker, I want to thank our chairman, Mr.
Rangel, for allowing me to manage this bill because he knows that in
Ohio, the foreclosure epidemic has gone from bad to worse, with new
cases growing by nearly 24 percent from 2005.
Another colleague of mine on this great committee, in my same class,
I yield 2 minutes to Mr. Larson of Connecticut.
Mr. LARSON of Connecticut. I thank the gentlelady from Ohio. And I
also join in commending and thanking Mr. Rangel and Mr. Neal for their
efforts in making sure that this legislation came to the floor.
Let me further associate myself with the remarks of the distinguished
gentlelady from Ohio. By the end of next year, 2 million foreclosures
will occur in this country. That's 2 million people and families whose
lives and finances will be uprooted, 2 million communities affected.
That's why it was so important for this committee to act. We should not
add to their burden. We have to make sure that we preserve the American
Dream for them.
The Ways and Means Committee reacted swiftly and reasonably to this
crisis and said what we could do was make it easier for those who get a
raw deal or are having a hard time. We could start by not making them
have to pay taxes on money they will never see. And that is the beauty
of this bill.
Also contained in this bill is a provision that helps firefighters
and first responders. It wasn't lost on Mr. Rangel, or Mr. Neal either,
that it wasn't the FBI or the CIA or the armed services who responded
at the World Trade Center, the Pentagon, or the fields of Pennsylvania.
It was volunteer firefighters. But the IRS, in its wisdom, chooses to
treat income that they receive from their county, their State or their
communities in terms of rebates on property tax or other equipment as
ordinary income. That is flat-out wrong. And again, I commend the
leadership for making sure that we address these issues.
Mr. LEWIS of Kentucky. Mr. Speaker, I yield 2 minutes to the
gentleman from Texas (Mr. Brady).
Mr. BRADY of Texas. Mr. Speaker, I have voted against this bill twice
in the Chamber. I rise today in support of it.
This bill will now, in the right way, provide relief to American
families who, after losing their homes in the past, have gotten a bill
from Uncle Sam, and it is wrong. At a time when people struggle to keep
their homes and they may lose them or have to sell them at a loss, we
shouldn't be kicking them when they are down. This bill will right that
wrong, giving taxpayers temporary relief for at least 3 years, and will
also allow taxpayers to continue to deduct the premiums that they pay
for mortgage insurance, which will help a number of people afford
homes.
But, Mr. Speaker, I am most pleased that the Senate stripped from
this bill something we sent out of the House twice, which was wrong.
What we attempted to do was to increase the taxes on people who own
second homes. Now, the original thought would be, that must be the
wealthy. It's not; it's the middle class. In fact, 40 percent of all
the home sales last year in America were to second homebuyers. And
they're not the wealthy. The average income of those buyers was
$82,000. So, we were punishing middle-class families for scrimping on
their first mortgage so they could save up for a vacation home or
resort home or retirement home or maybe even an investment. That would
have punished families. It would have hurt, I think, many communities
whose future relies upon retirees in resort and vacation homes, and
would have deepened the housing problems here in America rather than
aid them. A number of us fought against that provision. We're pleased
that the Senate removed it. This makes this a very bipartisan bill that
has strong support. I urge my colleagues to support this bill.
Let me point out, too, that I appreciate the leadership of Chairman
Rangel on this, and I appreciate that he recognized this problem and
moved on it. I appreciate the leadership of Mr. Lewis and Mr. Andrews,
who have fought for this legislation for many years.
Mrs. JONES of Ohio. Mr. Brady, we're happy you got a wake-up call.
Maybe you could bring us a few other Members over here to our side.
It gives me great pleasure to recognize now my colleague and good
friend from the committee, Mr. Blumenauer, for 2 minutes.

{time} 1615

Mr. BLUMENAUER. I appreciate the gentlewoman's courtesy in permitting
me to speak on this bill.
We are watching fiscal chickens come home to roost with this housing
bubble that is slowly working its way through the system. As my good
friend from Connecticut mentioned, we are looking at perhaps 2 million
foreclosures looming. There is another 2 million figure to keep in
mind, and that is the number of loans that are going to reset in the
next 18 months. And many of these people were not particularly
sophisticated. There are a number of folks that appear to have been
lured into subprime loans that actually would have qualified for
conventional, fixed-rate mortgages. And this is a ripple effect that
can have a very profound consequence for people.
If we see a 15-percent drop in housing values, which is projected by
Goldman Sachs, we are talking about millions of families who can be in
this situation of having phantom income. If it is a 20-percent drop, it
is 3.7 million. And some people feel that 30 percent correction is not
beyond question, and that would put almost 20 million American
homeowners in this negative territory.
It is important for us to make sure that people are not paying taxes
on phantom income. Frankly, I am a little disappointed that the
legislation that came back to us from the Senate is only 3 years
because I fear that this is going to be a longer-term problem. And,
frankly, I can't foresee any circumstance where this Congress would
like to apply tax rates on phantom income when anybody is under water,
getting a loan forgiveness. We have put careful provisions in this to
make sure that it is not unlimited, it is not for wild speculation, but
for typical, average everyday homeowners.
I hope we pass this bill, but I also hope that we look at a long-term
adjustment so that no one who is in this unfortunate circumstance ends
up making a tax payment on phantom income when they have lost their
home.
Mr. LEWIS of Kentucky. I reserve my time.
Mrs. JONES of Ohio. I join with my colleague to say I hope that at
some point we will be able to extend this so it has no sunsetting
provisions.
I yield 2 minutes to my colleague from New Jersey (Mr. Andrews).
(Mr. ANDREWS asked and was given permission to revise and extend his
remarks.)
Mr. ANDREWS. I would like to thank my friend from Ohio for yielding.
I would like to thank my friend, Mr. Lewis, for his hard work on this
legislation throughout the process, the gentleman from Louisiana (Mr.
McCrery), and obviously our chairman, Mr. Rangel, and other members of
the Ways and Means Committee, Mrs. Tubbs Jones in particular.
When we started working on this project, it was a matter of simple
fairness to Americans who sold a home under difficult circumstances.
Now, unfortunately, the problem has grown into one of economic urgency
because our economy is in trouble today in large part because of a drop
in housing prices and housing values. And one of the reasons that we
would have a glut on that market would be if people have to dump their
properties on the market because they can't get a workout on the loans
that they have because it would raise their taxes to come to a
different arrangement with their lender.
Through the wisdom of the committee, we are fixing this law in such a

[[Page H16772]]

way that will encourage people to work out an arrangement with their
mortgagee to work out a way they can pay their loans and stay in their
homes. And if they stay in their home, we won't have that glut of
supply in the housing market. If we don't have that glut of supply on
the housing market, prices will stabilize and not drop, which will mean
more Americans have more home equity, more Americans have economic
confidence, and our economy can rebound.
So I want to thank all those both on the Democratic and Republican
side of the aisle for making this project a reality, in particular the
staff of the Ways and Means Committee, for their hard work in making
this a reality and urge a ``yes'' vote on this bill.
Mr. LEWIS of Kentucky. I continue to reserve my time.

General Leave

Mrs. JONES of Ohio. Mr. Speaker, I ask unanimous consent that all
Members have 5 legislative days to submit remarks for the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Ohio?
There was no objection.
Mrs. JONES of Ohio. It gives me great pleasure at this time to yield
2 minutes to the gentlewoman from New York (Ms. Clarke). She is a
freshman in Congress and has been a leader in working on a lot of
issues, particularly this one; and I yield to her particularly because
this bill expands some of the coverages for cooperative housing
corporations which I am confident is an issue for the gentlelady from
Brooklyn.
Ms. CLARKE. Mr. Speaker, I want to commend and give praise to the
gentlewoman from Ohio for her management of this very important
legislation and, of course, to our distinguished chairman of the House
Ways and Means Committee, the dean of our New York delegation, for his
leadership on this issue and bringing this issue to the floor today.
I rise in support of H.R. 3648, the Mortgage Forgiveness Debt Relief
Act of 2007, because Americans need relief. We need relief. And under
this bill, the mortgage debt forgiven through foreclosure, sale, or
loan restructuring would no longer count as taxable income.
Mr. Speaker, this bill is extremely vital to many New Yorkers, since
a subprime tsunami is now sweeping across this Nation and many experts
confirm that this wave will continue well into the next year with no
end in sight. As a result, foreclosures are increasing at an alarming
rate.
As we count the last days of 2007, many expect more than 14,000
foreclosures to be filed in New York City alone. Mr. Speaker, Congress
must do all that it can to help Americans to keep their homes. So today
I will cast an ``aye'' vote in support of the Mortgage Forgiveness Debt
Relief Act of 2007, which helps struggling homeowners cope with the
unanticipated penalty of foreclosure.
Mr. LEWIS of Kentucky. In closing, I want to, again, thank Chairman
Rangel and Ranking Member McCrery. Jim and the chairman have certainly
done a good job in working together to bring about this piece of
legislation. Also I would like to thank the majority and the minority
staff for their hard work and effort on this. And, too, I would like to
thank Kevin Modlin on my staff. He has worked hard to help move this
legislation through the process. This is a good day for those
homeowners that are in much need of some help. And of course,
Congressman Andrews, thank you so much for your hard work on this and
putting it forward.
I yield back the balance of my time and ask for a ``yea'' vote on
this important piece of legislation.
Mrs. JONES of Ohio. Mr. Speaker, almost all of us dream of a day when
we can have a place of our own. For most Americans, buying a home is
the single best investment they will ever make. It is the first step to
building wealth and can provide financial leverage for a family for a
variety of things, including starting a business or funding an
education. Therefore, we must put safeguards in place to ensure that
people are able to keep their homes and not be thrown into further
debt.
That is one reason why I am pleased to rise in support of this piece
of legislation that will allow taxpayers to exclude from their income
debt that which was forgiven by a financial institution or lender. We
cannot sit by as Congress and add insult to injury to our most
vulnerable taxpayers. That is why I am so pleased to stand with my
colleagues on the other side of the aisle in support of this very
strong legislation in support of the American people.
I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from Ohio (Mrs. Jones) that the House suspend the rules and
concur in the Senate amendment to the bill, H.R. 3648.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the Senate amendment was concurred in.
A motion to reconsider was laid on the table.

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