Mortgage Forgiveness

Mortgage forgiveness refers to the cancellation of a portion of a borrower’s mortgage debt, allowing them to owe less than originally agreed. This often occurs in cases of financial hardship, such as job loss or severe illness, where the borrower is unable to make payments. Mortgage forgiveness can also apply in situations like loan modification programs or during foreclosure processes. However, it’s important to note that forgiven debt might be considered taxable income, meaning the borrower could owe taxes on the amount that was forgiven.