Urge Congress to pass Mortgage Debt Forgiveness and TRIA

Recently, you may have read PAR President Kim Skumanick’s Just Listed article highlighting some of the federal legislative issues that NAR is working on. This week, I attended the NAR’s Realtor® Party Member Involvement Committee meeting where two issues were highlighted: the Mortgage Debt Forgiveness Tax Relief bill and the Terrorism Risk Insurance Act of 2002 (TRIA). NAR has seen movement on these issues and we need your help in urging Congress to pass these bills.

The retroactive extension of the Mortgage Debt Forgiveness Tax Relief passed in the House. The U.S. Senate has not yet voted on the measure. Please urge your Senators to pass the Mortgage Forgiveness tax relief bill now.

The income tax exemption on mortgage debt forgiven in a short sale or a workout for principal residences expired at the end of 2013. Without immediate action by Congress, distressed homeowners will have to pay tax on “phantom income” from forgiven debt. Many families have decided not to go through with short sales or seek workouts because of the uncertainty over the status of the waiver. This is not only unfair but harms families, neighborhoods and communities. Please urge your Senator to extend this tax relief now.

The second legislation, TRIA, expires at the end of 2014 unless Congress reauthorizes it once again. Following the terrorist attacks of September 11, 2001, insurers backed out of the terrorism insurance market place prompting Congress to create a federal reinsurance risk-sharing program, TRIA, which also mandated that insurers make terrorism coverage available along with its property and casualty lines. Because of the importance of terrorism insurance coverage to commercial real estate, NAR supports the continued availability and affordability of coverage made possible by the federal backstop program of the “Terrorism Risk Insurance Act” and its extensions. If TRIA is allowed to lapse the terrorism insurance market in the U.S. will be disrupted and terrorism insurance coverage will be harder to get and more expensive.

Many of our commercial Realtors® and brokers work with clients who will be adversely affected if TRIA is allowed to expire at the end of 2014, or if renewed in such a way that constricts the ability of private insurers to provide the necessary coverage. After September 11, private insurers withdrew from the terrorism insurance market, causing construction projects to stall and commercial property values to drop. Without TRIA in place, commercial real estate financing will be thrown into flux, and the jump in premium rates that will occur will cause a reduction in the value of many commercial properties throughout the country.

Please urge your Representative to support S. 2244 when it’s brought up for consideration. We know that Realtors® can make a difference when our voices are heard at all levels of government.