The Senate has passed a bill written by Senator Debbie Stabenow that would allow homeowners to receive mortgage forgiveness from their lender tax-free.

Some homeowners are being forced to pay an income tax when they've had a part of their mortgage loan forgiven or have been forced to foreclose.

Stabenow says no one facing the loss of their home should have to deal with an additional tax bill. The Michigan Democrat says the bill is a first step.

Michigan has one of the nation's highest foreclosure rates and has recorded more than 135,000 foreclosure filings this year.

The IRS currently taxes any loan forgiveness as income. The tax forgiveness is available on mortgage indebtedness of up to $1 million.