Mortgage Interest Deduction Targeted for Cut in Obama’s Proposed Budget

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Among the many details of the nearly $3.7 trillion 2010 budget President Obama unveiled yesterday is a proposal to modify the mortgage interest deduction (MID), a part of the tax code since 1913. Not long after the budget was unveiled, NAR responded voicing its strong opposition to any proposal that messes with the sacred MID.

In short, the budget proposes to reduce the amount of mortgage deductability for joint tax filers earning more than $250,000 annually ($200,000 for single filers). In opposing the proposal, NAR believes that the change could result in:

  • a further erosion of home prices and home values;
  • greater distress on the balance sheets of banks as the collateral value of mortgage-backed securities declines; and
  • a second credit crisis emerging before the first one is resolved.

NAR has already sent a letter to President Obama and pledges to “use its formidable array of resources” against the enactment of the MID change as proposed; you should be hearing much more about this in the coming weeks.

Posted by Scott Sherrin at 11:37 am

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