Mortgage Deduction at Risk in U.S. Budget

A new proposal in the Obama administration's federal budget outline would limit the mortgage interest deduction (MID) amount for thousands of families, which would impact the housing market for everyone.

The NATIONAL ASSOCIATION OF REALTORS®, which has supported the Obama administration’s housing and stimulus plans, is opposed to this proposal. NAR President Charles McMillan has sent a letter to President Obama, saying that "there is never a good time to propose something that undermines the basic foundation of homeownership."

McMillan also released the following statement to members this afternoon:

"Fellow REALTOR®,You may have seen news reports about President Obama’s Budget Proposal that was released today at 11:30 a.m., Eastern Time. A small section of the sweeping budget plan has the potential to become a major impediment to a recovery in real estate markets across the nation. NAR is 100 percent opposed to the provision that modifies the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment.As currently drafted, the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000. This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values. If this proposal is enacted it will set off a new round of price depreciation, will cause greater distress on the balance sheets of banks as the collateral value of mortgage backed securities declines. A second credit crisis could emerge before the first one is resolved.As you read this NAR is launching a multiphase plan of action to eliminate this provision from the budget plan. In the next 24 hours, NAR will be expressing our concerns directly to President Obama, to all members of the United States House of Representatives and the Senate, placing advertisements in the publications read by Washington, D.C., decision makers. Additionally, NAR will be forming a coalition with other groups affected by this proposal. This communication is the first salvo of our response, we will continue to update you as the situation and events warrant."

For more information read: REALTORS® Oppose MID Reduction

For real estate information contact bill.swanson@cbshome.com or visit www.billswanson.com.