California Bankers Association Co-Sponsors Bills to Help Underwater Homeowners
Proposed legislation extends important tax relief to borrowers
SACRAMENTO – The California Bankers Association (CBA) announced today that it will co-sponsor two measures, Senate Bill 30 and Assembly Bill 42, which will extend important tax relief to borrowers who under this legislation will not be required to report the amount of debt forgiven by a lender due to a negotiated short sale or principal reduction resulting from a loan modification. By extending the sunset date for this tax relief to January 1, 2014, this legislation will eliminate a significant impediment for homeowners seeking viable alternatives to foreclosure.
“California’s banking industry is pleased to provide its full support to this legislation,” said Rodney Brown, CBA’s president and CEO. “CBA believes when debt is forgiven by a lender as part of an agreement with a borrower during the short sale or loan modification process, the borrower should not be penalized on their state income taxes.”
“During the past several years the CBA has worked with the California Legislature to enact no fewer than five dozen mortgage-related bills that address everything from loan origination to post-foreclosure practices in an effort to help borrowers in these difficult economic times,” Brown continued. “Co-sponsoring these measures is further demonstration of our commitment to support responsible legislation that will help distressed borrowers.”
About the CBA
Established 122 years ago, the California Bankers Association (CBA) is one of the largest state banking trade associations in the country. CBA leads the way in developing relevant educational and legislative solutions to some of California’s more pressing financial and banking issues, including adult financial empowerment, identity theft, financial privacy and financial elder abuse. CBA’s membership includes the majority of California’s commercial, industrial and community banks and savings associations. For more information, visit www.calbankers.com.
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