This petition is a request to have the Mortgage Debt Relief Act for all struggling homeowners currently in the process of a shortsale or mortgage modification program who are facing additional financial hardship if this act is not extended beyond December 31, 2012. The Mortgage Debt Relief Act of 2007 is set to expire at the end of 2012 and this could have a significant impact on short sales. Usually cancelled debt is considered income, but a provision of the Debt Relief Act allowed borrowers "to exclude certain cancelled debt on [a] principal residence from income. Debt reduced through mortgage restructuring, as well as mortgage debt forgiven in connection with a foreclosure, qualifies for the relief." If this act isn't extended, the slowly recovering housing market could decline sharply.
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