While many Ohio homeowners received mortgage assistance through federal and state relief programs in 2013, they may owe taxes on the assistance they receive if the Mortgage Forgiveness Tax Relief Act is not extended before the first of the year.
â€śAddressing the housing crisis is, we know, critical to our economy,â€ť said U.S. Senator Sherrod Brown (D-OH). â€śWhat pulls us out of a recession is housing and manufacturing.â€ť
Brown addressed the issue of the the Mortgage Forgiveness Tax Act, which would extend the relief from the Mortgage Forgiveness Deb Relief Act of 2007, in a media teleconference on Wednesday.
â€śIf the act isnâ€™t extended, homeowners will be taxed on this phantom income, they never actually received,â€ť Brown said.
In a 12 month period ending in September 39,000 sales (22 percent) were distressed and almost 19 percent of homeowners in Ohio were under water, owing more on their mortgages than their homesâ€™ values.
â€śForeclosures create a ripple effect beyond the affected homeownersâ€™ empty homes,â€ť Brown said. â€śEmpty homes hurt the entire neighborhood. They drive down property value deprive communities of residual resources for schools. They lead to an increase in crime.
Homeowners will be hit even harder if congress does not act soon, according to Brown.
â€śStruggling homeowners and communities will be hit with another challenge,â€ť Brown said. â€śWe should be doing everything possible to ensure Ohioâ€™s homeowners stay in their homes.â€ť
John Lynch, past president of the Ohio Association of Realtors, was also on the teleconference to discuss the tax relief act.
â€śIf this is not enacted, hundreds of thousands of American families will have to pay taxes on phantom income, money they have never received,â€ť Lynch said. â€śThis will destabilize communities where such homes are located.â€ť
Failure to pass the Mortgage Forgiveness Tax Act will exasperate an already existing issue.
â€śWe had a period for more than a decade we had more foreclosures each year than the year before,â€ť Brown said. â€śOhio homeowners were hit with job loss, especially in manufacturing.â€ť
Brown calls for his fellow senators and congressman to act now to not only help Ohio homeowners but millions of others across the country.
â€śThatâ€™s why Iâ€™m urging congress to do this this week, if not this week then when we get back,â€ť Brown said.