I'm going to reiterate my earlier response. It may be that the mortgage refinancing alone creates a taxable transaction for US tax purposes. As I said earlier, consult a tax professional who is versed in this area to determine if you need to report this for US tax purposes.
"Section 988 transactions are foreign currency transactions including
becoming a borrower under a foreign mortgage. Under the US law predating
section 988, the borrowing and repayment of the mortgage loan is a
separate transaction from the purchase and sale of the personal
residence. The repayment of the mortgage constitutes a closed and
therefore, taxable transaction. If the loan increases in value against
the dollar between the time of the original borrowing and the time of
the loan repayment, the amount of dollars required to retire the debt
would be less than the dollar value of the amount originally borrowed.
Therefore, a gain is recognised on the loan repayment."
"The issue of taxable income on redemption of a mortgage has been the
source of many difficult conversations over the past few months and we
have nothing but empathy with those clients having to find funds to pay
often unexpected liabilities resulting in this way. This is
particularly the case when the mortgage has been redeemed but the
property has not been sold as it can be difficult to find the funds to
pay the resultant tax liability where no proceeds have been generated. " (emphasis added)
http://www.taxadvisorypartnership.com/blog/us-tax/foreign-mortgage-exchange-rate-gain/
