[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.