WASHINGTON — Following the Senate's lead, the House ofRepresentatives yesterday passed the “Mortgage Forgiveness DebtRelief Act” (HR 3648) to give homeowners facing foreclosure sometemporary tax relief.

The bill would allow the refinancing of some subprime loans,removing an obstacle in the current tax code, which treats anyamount of forgiven debt as taxable income. The bill provides forthe discharge of indebtedness on loans up to $1 million and appliesto a principal residence in order not to trigger taxes. It isrestricted to discharges made between Jan. 1, 2007 and Dec. 31,2009. The President is expected to sign the bill.

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