US Mortgage Relief Act becomes law

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Source: CCTV.com | 12-21-2007 14:36

President Bush signs the Mortgage Forgiveness Debt Relief Act of 2007,Thursday, Dec. 20, 2007, in the Roosevelt Room of the White House in Washington. (AP Photo/Ron Edmonds)

US President George W. Bush has signed the Mortgage Forgiveness Debt Relief Act into law.

The measure will waive taxes for many homeowners who must restructure their mortgages as they face foreclosure.

The US housing market has seen serious strains in recent months. Property values have fallen in many parts of the country.

At the same time, the ongoing subprime lending crisis threatens middle-class homeowners, as many have seen their monthly payments increase faster than their ability to pay.

Jane Mercer, California Resident, said, "Many people are just one paycheck away from being on the street they are in trouble."

The new law principally erases the tax bill that many homeowners would face if a lender erased some debt to ease payments.

Before the law, debt that was forgiven in a foreclosure or as part of a loan workout was classed as income.

New home unders construction are seen outside of Chicago.  (AFP/File/Jeff Haynes)

George W. Bush, US President, "The bill I sign today will help this effort by ensuring the last thing you need to worry about."

Interest rates on as many as 1.8 million mortgages are due to rise sharply next year.

Across the nation, foreclosures are at an all-time high. Filings are up nearly a hundred percent from a year ago.

Officials say as many as half a million people could lose their homes as adjustable mortgage rates rise over the next two years.

Editor:Zhang Pengfei