You may have seen news reports about President Obama’s budget proposal that was released yesterday, February 26th, at 11:30 AM 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.
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 lead to 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.
The National Association of Realtors is 100% opposed to the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment. They will be expressing their concerns directly to President Obama, to all members of the United States House of Representatives and the Senate.
You can help too, call your senator and your state representatives today and urge them to fight against this provision in the budget plan.
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