By now almost all of you have heard about this tax act, hurriedly passed in the waning hours of 2007 -- and a few of you may even really understand it. The new law (effective Jan 1, 2007) is intended to grant forgiveness from those old rules that created taxable income. You can only qualify for a full tax-free cancellation of a mortgage default if the entire forgiven mortgage funds were used to purchase, improve or build your principal residence. The forgiveness tax act suggests possible mortgage workouts for some taxpayers -- without any mandatory rules. Consider this: "When a lender determines that foreclosure is not in its best interest, it may offer a mortgage workout under which the terms of the mortgage are changed to result in a lower monthly payment." A suggested workout plan endorsed by the Bush Administration and some lenders, would forgo adjustable rate resets for up to five years.