Mortgage Debt Relief Act

The Mortgage Debt Relief Act was a law that helped homeowners who faced foreclosure or had their mortgage debt forgiven during the financial crisis. It allowed them to exclude certain forgiven debts from their taxable income, meaning they wouldn't have to pay taxes on that amount. This was crucial for many struggling homeowners, as it provided financial relief and prevented them from facing additional tax burdens while already dealing with significant financial distress. The act has expired, but it played a vital role in alleviating the impact of the housing market collapse in the late 2000s.