Mortgage Debt Relief

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Business Law 201: Legal Issue Paper Mortgage Forgiveness Debt Relief Act of 2007 Extension Meghan M. Keough Meghan M. Keough Business Law 201 Legal Issue Paper, 11/25/2012 Outline: Mortgage Debt Relief Act I. Explain the legal issue II. Explain the factual situation behind the legal issue A. The purpose of the Act B. Applications of the Act C. Legal challenges of the Act III. Explain the current status of the federal/state law on the Act IV. Discuss the most recent court decisions V. Discuss my perspective on where I think the law should be on the Act Meghan M. Keough Business Law 201 Legal Issue Paper, 11/25/2012 A major precursor to the fall of the housing market in 2008, was due to mortgage…show more content…
The subprime mortgage crisis was the initial cause of the 2008 financial crisis, which then led to the worst recession since the Great Depression. (2) Many Americans felt the pain when those introductory adjustable rate mortgages reset to reveal higher payments that they could no longer afford. Banks, also, felt the stress as the word spread about the sheer volume of defaulted loans. As home prices continued to decline, without any hopes of a market turn around, both home owners and financial institutions where in a poor situation. In a proactive approach to the foreseeable future, on December 20, 2007, former President Bush signed into law, the Mortgage Forgiveness Debt Relief Act of 2007. In a press release from The White House it stated that “President Bush signed the Mortgage Forgiveness Debt Relief Act of 2007, which will help Americans avoid foreclosure by protecting families from higher taxes when they refinance their home mortgages. This Act [created] a three-year window for homeowners to refinance their mortgage and pay no taxes on any debt forgiveness that they receive. 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 income that can be taxed. This Act will increase the incentive for borrowers and lenders to…show more content…
Amadeo, Kimberly. "Understanding the Subprime Mortgage Crisis." About.com US Economy. Www.about.com, 20 Mar. 2012. Web. . 3. Cameron, The New York Times, Christopher. "Renewal of Mortgage Debt Forgiveness Legislation Seen as Crucial to Housing Recovery." Www.therealdeal.com. Www.therealdeal.com, 21 Oct. 2012. Web. . 4. Goldhaber, Mark, and Julia Gordon. "Extend and Broaden the Mortgage Debt Relief Act Now." American Banker RSS. Www.americanbanker.com, 5 Sept. 2012. Web. . Meghan M. Keough Business Law 201 Legal Issue Paper, 11/25/2012 Works Cited, Continued 5. Harney, Kenneth. "Congress Weighs Mortgage Relief Extension." Www.therealdeal.com. Www.therealdeal.com, 10 Aug. 2012. Web. . 6. Horwitz, Jeff. "New York Attorney General Sues Credit Suisse Over Mortgages." American Banker RSS. Www.americanbanker.com, 20 Nov. 2012. Web. . 7. Morrison & Foerster. "The Dodd-Frank Act: A Cheat Sheet." Www.mofo.com. Www.mofo.com, 2010. Web. Oct.-Nov. 2012. . 8. The New York Times. "Financial Regulatory Reform." The New York Times. Www.nytimes.com, 20 Sept. 2011. Web. 22 Nov. 2012. . Meghan M. Keough Business Law 201 Legal Issue Paper,
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