In what has become a yearly tradition, Congress voted to extend the Mortgage Forgiveness Debt Relief Act to 2017. This bill is incredibly important for foreclosure defense. As I have written before, homeowners who have received loan modifications and done short sales often have a portion of their mortgage loan debt forgiven by their servicer. Under the tax code, this forgiven debt is income, and can result in an enormous tax bill for homeowners trying to avoid foreclosure. If this forgiven debt is taxable, the benefits of foreclosure defense would go out the window: the homeowner would save the home, but face a huge tax bill from the IRS. Given this reality, the Mortgage Forgiveness Debt Relief Act is essential for foreclosure defense. One would hope in the future, however, that the President and Congress would make this legislation permanent, and avoid the end-of-year drama of determining whether or not this important relief is extended.