Homeowners who renegotiate their mortgages are also getting some relief from a new tax law in California.

The newly signed law gets you off the hook for a tax liability resulting from any 2013 deal with your mortgage lender to reduce the principle amount you owe on your home.  

Without this change in California law, the debt forgiven would be considered income on which you would otherwise owe taxes, even though you never actually see it.

This is already part of federal law, so the tax relief now covers both federal and state income taxes.  

The California Bankers Association in statement is praising the law which keeps you from being elevated into a higher tax bracket based upon forgiven mortgage debt.