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Immigration Reform In June, the Senate voted 46-53 not to limit debate on bi-partisan comprehensive immigration legislation (S. 1639). This doomed the bill and the issue for the remainder th of the 110 Congress. Although Congress was unable to reach agreement on a comprehensive measure, lawmakers did defeat attempts to restrict local government authority to enact immigration-related measures. The rejected provisions included efforts to prevent the use of federal funds by cities that have adopted policies involving privacy restrictions related to immigration status, restricting the use of English-only provisions, or providing rental housing for illegal immigrants. In the omnibus spending legislation, Congress did provide a nearly $2 billion increase in funding for border security and enforcement of immigration laws. (Leslie Wollack, wollack@nlc.org, 202.626.3029) Housing Finance System Reforms Receive Priority Attention Congress and the Administration have considered several proposals to address the crisis in the housing market; so far, one bill has become law. On Dec. 20, the President signed into law H.R. 3648, the Mortgage Forgiveness Debt Relief Act. Under current law, if the value of your house declines and your bank or lender forgives a portion of your mortgage, the tax code treats the amount forgiven as money that can be taxed as income, which can make a difficult situation even worse. This bill creates a three-year window for homeowners to refinance their mortgage and pay no taxes on the debt forgiven as a part of the transaction. Other federal initiatives to address the housing market crisis are pending and will continue to be debated in 2008. Those include: Mortgage Reform and Anti-Predatory Lending Congress and the Administration have offered separate, and in some ways competing, responses to predatory lending and unsound investment practices central to the current home foreclosure crisis. This crisis and the resulting credit crunch are spreading well beyond the housing market and are now impacting the cost of credit for local government borrowing, as well as local property tax revenues. The House passed legislation, H.R.3915, would prohibit certain predatory lending practices and make it easier for consumers to renegotiate predatory mortgage loans. The Senate introduced similar legislation late last year (S.2452). Leadership in both chambers reached out to NLC for support and assistance to enact or advance their respective bills. Both chambers are expected to continue to focus efforts on this issue and the legislation in 2008. Meanwhile, the Administration proposed new lending rules, under the existing authority of the Federal Reserve, similar to key consumer protection provisions contained in the pending legislation. However, Democratic leaders have attacked the Administration's efforts as not going far enough to help as many homeowners as possible. NLC will