    [Public Papers of the Presidents of the United States: George W. Bush (2007, Book II)]
    [December 20, 2007]
    [Pages 1587-1588]
    [From the U.S. Government Publishing Office www.gpo.gov]

    Remarks on Signing the Mortgage Forgiveness Debt Relief Act of 2007
    December 20, 2007

        Thank you all for coming. Welcome to the White House. I'm pleased to
    sign a bill that will help homeowners who are struggling with rising
    mortgage payments. The Mortgage Forgiveness Debt Relief Act of 2007 will
    protect families from higher taxes when they refinance their homes. It
    will help hard-working Americans take steps to avoid foreclosure during
    a period of uncertainty in the housing market. I want to thank Members
    of Congress for getting this bill passed. I appreciate it very much.
    It's been a joy working with you.
        I thank my Secretary of the Treasury, Hank Paulson, and Secretary of Housing and Urban Development,
    Alphonso Jackson, for taking the lead in
    helping people stay in their homes. I particularly want to thank the
    chairman of the Finance Committee, Max Baucus, Senator Debbie Stabenow of Michigan, and Senator George Voinovich of Ohio for sponsoring this legislation.
        I remember calling you on the phone, telling you that I'm going to
    propose the same thing you are--talked to George as well--and it's been a joy to work with you.
        I want to thank Jim McCrery of the
    House, Stephanie Tubbs Jones, and Rob
    Andrews. Appreciate you all being here.
        I want to thank the staff who works hard at the Treasury and HUD to
    make this deal work. Appreciate your hard work.
        In recent months, our Nation's housing market has faced serious
    strains. Home values have fallen in many parts of our country. At the
    same time, many homeowners with adjustable rate mortgages have seen
    their monthly payments increase faster than their ability to pay. And
    now some homeowners face the prospect of foreclosure.
        My administration has taken strong steps to help homeowners avoid
    foreclosure by making it easier to refinance loans. We gave the Federal
    Housing Administration greater flexibility to refinance loans for
    struggling homeowners. We helped assemble a private sector group of
    lenders, loan servicers, investors, and mortgage counselors called the
    HOPE NOW Alliance. This group has agreed on a set of industry-wide
    standards to help those with subprime loans refinance or modify their
    mortgages, so more families can stay in their homes.
        The bill I sign today will help this effort by ensuring that
    refinancing a mortgage does not result in a higher tax bill. Under
    current law, if the value of your house declines and your bank or lender
    forgives a portion of your mortgage, the Tax Code treats the amount
    forgiven as money that can be taxed. And of course, this makes

    [[Page 1588]]

    a difficult situation even worse. When you're worried about making your
    payments, higher taxes are the last thing you need to worry about. So
    this bill will create a 3-year window for homeowners to refinance their
    mortgage and pay no taxes on any debt forgiveness that they receive. And
    it's a really good piece of legislation. The provision will increase the
    incentive for borrowers and lenders to work together to refinance loans,
    and it will allow American families to secure lower mortgage payments
    without facing higher taxes.
        With this bill, Congress has taken a strong step to address the
    turbulence in the housing market. Yet there's more work to be done. The
    Congress needs to pass legislation permitting State and local
    governments to issue tax-exempt bonds for refinancing existing home
    loans. And Congress needs to pass legislation strengthening the
    independent regulator of Government-sponsored enterprises like Freddie
    Mac and Fannie Mae, so we can keep them focused on the mission to expand
    homeownership. Congress needs, as well, to complete work on responsible
    legislation modernizing the Federal Housing Administration, so that we
    can give the FHA the necessary flexibility to help hundreds of thousands
    of additional families qualify for prime-rate financing.
        By taking these steps, we can help our homeowners, and we'll help
    more Americans become homeowners. We want people to have a place they
    can call their own. After all, it's an essential part of the American
    Dream. And we want that dream to extend throughout our Nation.
        I want to thank the Members for joining us. I wish you all happy
    holidays. And this is going to make a happy holiday for many homeowners.
    Thanks for coming.

    Note: The President spoke at 1:05 p.m. in the Roosevelt Room at the
    White House. H.R. 3648, approved December 20, was assigned Public Law
    No. 110-142.