A number of articles in the Times in the last week have been inspired by the mortgage meltdown. An editorial in today's paper, titled "Foreclosure and Taxes," after noting problems with taxation of forgiven debts (our earlier posts on that subject can be found here), including erroneous tax assessments, argues:
Congress needs to pay attention. * * * the help that is most needed now is for overwhelmed state, local and nonprofit agencies that counsel beleaguered homeowners on how to renegotiate loans and how to get free or low-cost advice on tax and legal issues. There is no reason for Congress to delay on this.
An article earlier this week reported on Democratic proposals to deal with the broader mortgage problems; the link is here. In general, the Democrats favor more aggressive approaches than the Bush administration. Finally, an article in last Sunday's Real Estate section, "Short Sales: Saving Borrowers the Stigma of Foreclosure," reported on how consumers can avoid foreclosure by agreeing to a short sale, though at the cost of damage to their credit report, the loss of their home (and perhaps, in light of the later reports, a hefty tax bill).
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