Homeowners facing foreclosure and any shortfall of funds due to their lender were subject to tax by the Internal Revenue Service. A person could lose their home in foreclosure and the lender could suffer of loss of say, $100,000. According to a tax law enacted in 1986, the lender was required to mail a 1099 to that ex-homeowner for the dollar amount of loss suffered by the lender.As an example: A loss of $100,000 is reported on the foreclosed homeowner. That $100,000 would be added to their other W-2 and 1099 income. If our ex-home owner usually made $50,000, the $100,000 1099 would then increase their income to $150,000 and would be taxed at 50%. It is possible that the tax bill would be $75,000 for the tax year.  Essentially, someone in a very bad situation could go from the frying pan into the fire! The Bill H.R. 3648 relieves the homeowner from that tax liability. This applies only to a person's principal residence. To my understanding, this bill has been approved by the Senate and need only be signed by the President.  I have several proven methods to keep homeowners in their homes, but this legislation brings a huge sigh of relief for many, many homeowners across the country. My next installment will be regarding relief for tenants impacted by a foreclosed property.   Please come back again soon!