With More than One-Quarter of Cuyahoga County Mortgages Underwater, Brown Urges Reinstatement of Provision that Helps Struggling Homeowners Avoid Tax Increase Starting this Year

CLEVELAND, OH – January 7, 2013 – (RealEstateRama) — Today, with more than one-quarter of Cuyahoga County mortgages underwater, U.S. Sen. Sherrod Brown (D-OH) called for immediate Congressional action to reverse a tax increase imposed on struggling homeowners that began January 1. Before the New Year, Senate Republicans refused to take up and pass legislation that would have relieved, for one year, the requirement for homeowners to pay taxes on mortgage debt forgiveness resulting from mortgage modifications, or short sales. Unless the plan Brown supports is passed, principal reductions that homeowners receive on their loans through mortgage modifications or short sales will be treated as income by the Internal Revenue Service (IRS)—sticking already struggling homeowners with tax bills that they may be unable to afford.