(COLUMBUS, Ohio)-Ohio Attorney General Mike DeWine today praised the extension of tax relief to distressed homeowners who receive relief from the National Mortgage Settlement. The tax provisions, requested by DeWine and 38 other Attorneys General, were passed and signed into law on January 1st as part of the American Taxpayer Relief Act of 2012.
"The National Mortgage Settlement is an important tool to help those affected by the housing crisis, many of whom face financial hardships. That is why it makes so little sense to tax benefits received from the settlement," said Attorney General DeWine. "The passage of this common sense relief ensures Ohio families will not be penalized for participating in the settlement."
In February 2012, DeWine and 48 Attorneys General signed a National Mortgage Settlement with the nation's five largest mortgage servicers. The Settlement provides $17 billion in debt reduction and other relief to homeowners. A report in November by the settlement monitor noted that the servicers reported providing more than 4,500 Ohioans mortgage relief totaling than $165 million.
Pursuant to the Mortgage Debt Relief Act, which went into effect in 2008, many types of forgiven mortgage debt provided to a homeowner in financial hardship may be excluded from a taxpayer's calculation of taxable income. However, this tax relief was set to expire on December 31, 2012. The legislation passed by congress extends the relief until January 1, 2014.