: Can Your Clients Afford Elimination of the Mortgage Interest Tax Deduction? Do Something About It!

Can Your Clients Afford Elimination of the Mortgage Interest Tax Deduction? Do Something About It!

It's back...President Obama has again called for limitations on the Mortgage Interest Tax Deduction.  Lenn Harley has been telling us about this for quite a while.

This IS a big deal, so contact your congressional representatives and share your opinion.  If you don't know how to contact them click here.

Here's the letter I just emailed to my representatives.  Feel free to use it all or in part. 

An Open Letter to Senators Lautenberg and Menendez & Congressman Adler:

As a REALTOR® and an Accredited Buyers Representative® working with home buyers in southern Ocean County, I'd like to call attention to a portion of President Obama's budget message that is cause for concern.

The President's budget proposal includes changes to the Mortgage Interest Tax Deduction.  This proposed change only effects families earning over $250,000, but it could be the first step toward total elimination of one of the primary benefits of home ownership.  

President Obama doesn't target the Mortgage Interest Deduction directly, rather he wants to cap the rate of all itemized deductions for couples or families over that $250,000 ($200,000 for individuals)  earning limit. 


The National Association of REALTORS® (NAR®) claims enactment of this proposal will set off a new round of home price depreciation, creating a new housing crisis.

I'll leave the depreciation arguments to NAR®.  What I do know is my first time home buyer clients cite the Mortgage Interest Deduction as the major reason buying rather than renting makes financial sense.

Don't underestimate the importance of first time home buyers.  The Consumer Confidence Index by the NAR® Research Division in December 2009 indicated 43% of the homes sold were purchased by first time home buyers.

Enactment of President Obama's limit of Mortgage Interest Deductions could have a chilling effect on these first time home buyers and buyers at all economic levels. Consumer doubt and uncertainty is not what our Country's economy needs as we struggle toward recovery.

Please oppose any changes to the Mortgage Interest Deductions.

Sincerely,

Laura Giannotta
Manahawkin, NJ

 

 
 
 
  

     
Comment balloon 81 commentsLaura Giannotta • February 04 2010 05:07AM

Comments

Well done Laura.  Thanks for the mention.  Reducing the mortgage interest deduction for home owners is a severe tax increase on home owners. 

Sadly, American home owners have been the group most injured by the perfidy of those in power to manipulate and manage the real estate industry. 

I simply don't know how much more injury the American family can indure.

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) over 9 years ago

Thank you Laura-Mortgage Interest tax deduction is definitely a valuable benefit of home ownership.

Posted by Catherine Chaudemanche - Edison & Central NJ, Full Time, Informed and Involved- Results Driven (Metuchen Keller Williams Elite Realty / Middlesex County, NJ) over 9 years ago

In Canada, we are not able to deduct mortgage interest on residential properties where we reside in most situations.

Posted by FN LN over 9 years ago

Lenn, your blogs always get me thinking!  I appeciate that!

Cathy, the deduction is expecially important here in NJ!

Marc, Mortgage Interest Tax Deduction is (or has been) untouchable here in the states!

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) over 9 years ago

Eliminating the deduction for top earners will have a more adverse effect on key areas of our country !

Posted by Michael J. Perry, Lancaster, PA Relo Specialist (KW Elite ) over 9 years ago

Thanks for keeping this at the forefront of our minds. I will be sharing my opinion with my representative.

This type of change will affect me personally and professionally.

Posted by Markita Woods NMLS#196099, Queen of Mortgages - FHA, VA, Conventional, USDA (Fairway Independent Mortgage) over 9 years ago

Good article and good post. The stuff coming out of Washington these days  is very confusing. Will have to see where it goes.

Posted by Tony Grego, 317-663-4173 #1 Trade Association for Alternative Inv (REISA - 317-663-4173) over 9 years ago

Laura, Thanks for alerting us to this possibility. Sounds like a very slippery slope to me.

Posted by Barbara Jenness, St. Augustine FL Real Estate (Barbara B. Jenness, P.A. - St. Augustine, FL) over 9 years ago

I had not thought this deal through until I read your post. Our government is throwing another group under the foreclosue bus! Thanks for the insight.

Buddy Snipes

Posted by Buddy Snipes (Trusted Agent, Inc.) over 9 years ago

I don't believe reducing the deduction will effect the first time home buyer market much (because of the income limits)......but will be another blow to the move up market.

I wrote many letters and sent many emails to get the first time home buyer's credit extended and expanded. I was surprised that I actually got responses! Contacting Washington does work. And on a side note:

The $6500 credit for existing owners (primary residence for previous consecutive years of atleast 5 of 8) was a great idea but I don't think Washington understands the time involved to prepare a property, list it, market it, close on it, and purchase another property. Also, the $6500 may be some consolation for selling with current conditions (lower prices) but unless you had already decided to sell this credit alone will not be alot of motivation. Atleast in my local market the number of active listings is down.....if this credit was getting any attention that would not be the case. The mood I hear is if you are blessed to be able to hang on to what you have just keep hanging on. Though this credit does allow for moving down to a less expensive property the cost of selling and buying just does not add up and so many current owners have just refinanced.  

Posted by Tom Hess (Gregg's Team with Keller Williams) over 9 years ago

Tom, I must disagree.  Once the door is open to tinkering with the mortgage interest deduction, it will be very difficult if not impossible to close. 

If government finds a source of money, they've shown time and time again, they'll go back to that source until it its gone!

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) over 9 years ago

Laura:

This should be of great concern to all of us. The housing market cannot endure any more injuries - and this would be a huge one.

 

Posted by Claudette Millette, Buyer, Broker - Metrowest Mass (The Buyers' Counsel) over 9 years ago

Perhaps I wasn't clear in my post. I totally agree that the removal of the deduction needs to be fought. It will hurt the move up market the most which is the market in the worst condition. I was trying to encourage agents to send emails and letters and used my comments on fighting to extend the 1st Time Home Buyer's Credit as proof that these letters and emails are being read. I sometimes fail to connect the dots in my posts.

Posted by Tom Hess (Gregg's Team with Keller Williams) over 9 years ago

Perhaps I wasn't clear in my post. I totally agree that the removal of the deduction needs to be fought. It will hurt the move up market the most which is the market in the worst condition. I was trying to encourage agents to send emails and letters and used my comments on fighting to extend the 1st Time Home Buyer's Credit as proof that these letters and emails are being read. I sometimes fail to connect the dots in my posts.

Posted by Tom Hess (Gregg's Team with Keller Williams) over 9 years ago

Laura ~ Thank you for the information. I did email Sen. Barbara Mikulski (D-MD) .

Posted by Monique Hailer, South West Florida & Southern Maryland Homes (Schooner Bay Realty., Inc. & CENTURY 21 New Millenniun) over 9 years ago

Thanks for straightening me out Tom!  I might have been reading without my brain fully engaged!LOL 

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) over 9 years ago

Hi Laura -- If this were to go away, it would be huge.  I have had many first-time homebuyers know the impact of the deduction on their payment and this has determined the price range of houses they looked at, same with move-up buyers.  So...I think this would put a lot of downward pressure on prices should this occur.

Posted by Chris Olsen, Broker Owner Cleveland Ohio Real Estate (Olsen Ziegler Realty) over 9 years ago

My primary objection to the proposal is that it will not eliminate all mortgage interest deductions for homeowners.  I am not in favor of a tax increase of any kind, just a change to tax policy.

The interest deduction in the US made it more attractive for some owners to cash-out refinance and transfer equity from their home to their driveway. Interest deductibility caused many of the foreclosures, albeit indirectly. By rewarding homeowners for having less equity in their homes, our tax policy has to accept much of the blame for the real estate crisis.

It’s time to take a look at alternatives to interest deductibility. It seems that a home ownership tax credit in lieu of interest deductibility may be a better way. No mortgage interest should be tax deductible. Instead, give a home ownership tax credit. It should be every year for as long as you own your home. The amount could be based on the purchase price of your home, and it should probably be in the area of 1%. This would encourage home ownership without encouraging home debt. Crafted correctly, the change should be revenue neutral and encourage move-up buying.

Posted by Mike Carlier, More opinions than you want to hear about. over 9 years ago

Laura, 

Great point and interesting comments.  It would be wonderful if all Americans could live within their means and afford a home to have this deduction (or some logical credit to building an asset base.)  

Let's face it, for many their homes are their piggy bank for retirement.  Here, I am specifically talking about if you stay in your home over time, the value has appreciated and you have a nice nest egg for retirement.  

The mortgage interest deduction is a very nice way to help ENCOURAGE folks to save for their future in home ownership.  Now, I appreciate the concern of folks constantly refinancing, but for many at least the first mortgage is a real need to buying the home.  While this makes this slightly tricky, I hate to see this go away, as our real estate markets are already treading precariously and could really be significantly impacted by this going away for earners over @$250,000k.  

I'm off to write my congressmen and senators.  

All the best, Michelle

Posted by Michelle Francis, Realtor, Buckhead Atlanta Homes for Sale & Lease (Tim Francis Realty LLC) over 9 years ago

Laura, it is amazing that Obama would go after somethinking like this with the market already struggling.

Posted by Ted Tyndall, I will help You find the Home YOU want to Buy (Davidson Realty Inc.) over 9 years ago

Thank you, this needs to be addressed.  I am going to reblog it to get it out there.

Posted by Kyle Jan, Phoenix AZ Homes for Sale over 9 years ago

Obama is after a lot of things that will adversely affect housing.  I really don't get it.  Everyone but Obama seems to realize that to recover the economy we need to recover housing in the process.

Posted by David Monsour, ABR - www.realty-insights.com (Keller Williams Keystone Realty) over 9 years ago

At first it starts with a little drop, then a trickle, then . . . the floodgates break. 

Posted by Carla Muss-Jacobs, RETIRED (RETIRED / State License is Inactive) over 9 years ago

Laura - Great post and I will be fowarding your letter to my district as well... thanks for the reminder on this.. Much Appreciated... I too will re-blog...

Posted by Robert Hammerstein, Bergen County NJ Real Estate (Keller Williams Valley Realty) over 9 years ago

Laura, I appreciate your post as much as I can with a heavy heart. Lenn sums it up nicely and all I can say is, sad.

Posted by James Lyon (Vista Pacific Realty) over 9 years ago

Laura...I have already sent out my letter.  Sonme are starting to call me by my first name!

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) over 9 years ago

Laura - thanks for the link and thanks for the letter we can personalize. I'm going to go do this right now. The tax interest deduction is HUGE and families earning over $250,000 in many states is the middle class.

Posted by Christianne O'Malley, Exceptional Service - Delivering Results in Reno! (RE/MAX Realty Affiliates) over 9 years ago

So the elimination of the tax deduction for homeowners is back on the table. I doubt it will pass. The sale of homes and related spending on furnishings and services are a huge part of our economy. Let's hope logic prevails.

Posted by Millie C. Legenhausen, CRS, GRI, CIPS, MBA, Realtor (Calcagni Real Estate, Hamden, Connecticut) over 9 years ago

This is typical Obama: Short-sightedness, even after proclaiming a great understanding of our problems and promising creative ways of solving them.

Posted by Aaron Vaughn | Builder | Investor, If the deal makes sense, the cash will follow. (Conifer Homes) over 9 years ago

There are some very interesting points brought up in the comments.  I have to agree fully with your post, Laura, that if Obama were to get his way, there will be more pitfalls in the housing industry in the near future.

Posted by Jim & Maria Hart, Charleston, SC Real Estate (Brand Name Real Estate) over 9 years ago

Great letter, thanks for the boilerplate!

Posted by Barb Fischer, San Diego and La Mesa Real Estate (Big Block Realty) over 9 years ago

This is important for all of us! Buyers, sellers and agents! Not to mention it WILL have a negative effect on housing prices!!!

Posted by Todd & Devona Garrigus, Broker / REALTORS® (Garrigus Real Estate) over 9 years ago

This is typical "Let's tax the rich" idealogy coming out of Washington. If they really want to raise tax revenues, they should lower tax rates. If any of you are Jude Wanniski or Art Laffer fans, you will know what I mean!

Posted by Phil Caulfield, I Get The Loans Done That The Big Banks Don't! (Guarantee Mortgage) over 9 years ago

E.J. in comment #18 presents a great alternative.  Giving a tax credit on the purchase price of the home instead of on the interest.

I don't think it's right to encourage and reward people for going into debt.  I thought it was good when the personal interest deduction was elimanted.   But that just got people refinancing their homes in  order to finance personal items.

If you want to reward behavior that will be good for the economy, eliminate all tax on interest earned, dividends and capital gains.  That would encourage people to save and invest which is what we will need to do to get out of this mess. 

 

 

Posted by Tim Maitski, Truth, Excellence and a Good Deal (Atlanta Communities Real Estate Brokerage) over 9 years ago

Laura, The tax deduction for mortgage interest is simply one of the few things that keep home sales viable period.

Posted by Steve Loynd, 800-926-5653, White Mountains NH ( Alpine Lakes Real Estate Inc., ) over 9 years ago

Great Post.  and we can't afford to lose any benefits to owning a home right now. 

Posted by David Krichmar, DaveYourMortgageGuy.com (www.DaveYourMortgageGuy.com - Legend Lending) over 9 years ago

In many areas we have already gone from a move up market to a move down one.This would be critical for the 2nd & vacation property market that is not treated as rental. This particular market segment is in the absolute doldrums right now anyway and I know it won't go back to the highs of 2006 because it WAS too easy to get 100% ltv, interest only, take your firstborn after 5 years, alt A, Option arm death loans. BUT I do expect to go back to the traditional 2nd/vacation home buyer-successful, kids through college thinking about retirement in the future & buying a good 2nd home with plans of eventually selling the 1st. Take away the tax credits available & it will rapidly go downhill from there.  ;(

Posted by Chris Oliver (Century 21, Preferred Properties) over 9 years ago

Like a lot of things it is always brought up by both parties, and always voted down.

Posted by Joe Pryor, REALTOR® - Oklahoma Investment Properties (The Virtual Real Estate Team) over 9 years ago

Laura - Reducing the home mortgage deduction diminishes the attractiveness of one of the most prized goals in our society.

Posted by Wendy Rulnick, "It's Wendy... It's Sold!" (Rulnick Realty, Inc.) over 9 years ago

Even though I do not think it will pass I am sadden by the stupidity of our government.  The politicians are living in a different world and worry more about getting re-elected and their benefits than what the public needs.

Posted by Sheryl Knowles over 9 years ago

Thank you Laura...we are on it !!!!

Posted by Sally K. & David L. Hanson, WI Realtors - Luxury - Divorce (EXP Realty 414-525-0563) over 9 years ago

Thanks for sharing. I feel this certainly takes money out of the pocket of homeowners. It is very important for us all to be very proactive in the defense of home ownership. 

Posted by Joseph Keech (Blue Atlantic Properties) over 9 years ago

This would just be another nail in the coffin for the housing market.  I'm sending this letter, Laura.  Thanks for calling our attention to it.

Posted by Barbara Altieri, REALTOR-Fairfield County CT Homes/Condos For Sale (RealtyQuest/Kinard Realty Group, Fairfield and New Haven County CT Real Estate) over 9 years ago

Laura and everyone,  REMEMBER this is just a proposal.  

Added Friday:  Based on later comments I misread the intent of the post.  Disregard the math here, it was my mistake that the deductablity of PMI/MI was the proposal. 

I am not a accountant or CPA and I wish someone here could post a hypothetical as to the cost of this proposal.   I will try some math here,  Lets assume a 400,000 purchase with 10% down.   The monthly PMI would be about 180.00 per month or 2,160 per year.  (360,000 X .60 /12)  For sake of discussion lets assume the borrower is in a 30% Tax Bracket. (for my ease in Math)  That means the 2,160 would save the borrower about 648.00 in taxes because they can deduct the Mortgage Insurance paid.   Lets divide the 648.00 in tax savings to determine the monthly cost if the Deductiblability of PMI were removed.  I believe it is 54.00 Per month.    Now how much more of a home with $54.00 per month buy?    I believe this borrower could only afford a 390,000 mortgage.  

Sorry to say, only permitting a them to finance 390,000 instead of the 400,000 should not kill the real estate market.  If anyone sees an error in my math, please present the math that supports something worth talking about.   NOT JUST A PROPOSAL.  

Remember the negativity we present to our clients will effect their actions much more that the .40 of 1% of their reduced purchasing power. 

Just my .02Cents here.   

Posted by Tim Bradford, NMLS 250013 over 9 years ago

"I am from the government and I am here to help you". This idea is just what the housing market needs. The final dagger in the heart. This is change we do not need.

Posted by Tom Bailey (Margaret Rudd & Associates Inc.) over 9 years ago

Thanks for the post, Laura.

"Pay no attention to the man behind that curtain!!!"

The mortgage interest deduction is a great big positive of home ownership...especially in New Jersey, where our taxes are already ridiculously high!

Important to remember....What big government proposes, many times comes to fruition. It's always more than initially proposed, it never gets smaller and it NEVER goes away.

Something to look forward to, though...As soon as the George Washington Bridge is paid off, they'll stop charging tolls!!! Keep the CHANGE!

All the best!

Brian Morgenweck, Broker/Owner

Power Realty Group, Hackensack, NJ

 

Posted by Brian Morgenweck, Broker/Owner, GRI, CRS, ABR, SRS (Power Realty Group, LLC Bergen County, NJ ) over 9 years ago

Awesome post and letter, thank you for sharing it with us!!  Our luxury market is in decline currently and this will NOT help with high end properties!

Posted by Renée Donohue~Home Photography, Western Michigan Real Estate Photographer (Savvy Home Pix) over 9 years ago

This is a well written letter explaining the reasons this elimination could have negative effects on so many.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) over 9 years ago

ToulaRosebrock,com

Hi Laura:

Well done!

Congratulations on the feature.

Certainly, this is something that we all need to be concerned about!!!

Posted by Toula Rosebrock, Broker/Sales Associate, Realtor, Lacey Township, (Diane Turton, Realtors, Forked River, NJ) over 9 years ago

ToulaRosebrock,com

Hi again Laura:

Came back to let you know that I re-blogged your post!

Posted by Toula Rosebrock, Broker/Sales Associate, Realtor, Lacey Township, (Diane Turton, Realtors, Forked River, NJ) over 9 years ago

Great letter.  I can't believe that this could really get traction to pass at this point, but with this administration none can afford to take chances.

Posted by David Henke, Realtor, Homes Just West of Philadelphia PA (Long & Foster Real Estate, Inc) over 9 years ago

Yes we have a mess on our hands and the solutions, no matter what is chosen, will be hard to take.  It would stand to reason that home prices will be affected.  I look forward to following this as it impacts us and our clients in this business.

Posted by Frank Castaldini, Realtor - Homes for Sale in San Francisco (Compass) over 9 years ago

Tim Bradford in #45.  I think you are missing what is being discussed here.  It's not private mortgage insurance, it's mortgage interest.  That's a huge difference.

I worked the numbers for your $400,000 example.  Interest at 5% would be $17,879/year.  At your 30% tax bracket, that would save you $5363/yr in tax savings or $449/month.  That would be able to cover about $85,000 of a mortage. 

That means that now someone can afford only a $315,000 instead of a $400,000.  I'd say that is quite significant.  I didn't realize how much of a difference it can make until I worked the numbers.

Posted by Tim Maitski, Truth, Excellence and a Good Deal (Atlanta Communities Real Estate Brokerage) over 9 years ago

We have paid off our mortgage, but am very concerned for everyone else, and our children!

Posted by Dagny Eason, Fairfield County CT, CDPE Homes For Sale and Condo (Dagny's Real Estate) over 9 years ago

Wow, this is a huge problem and noone out there, beyond the real estate industry, understands what they're talking about.

Posted by Tina Gleisner, Home Tips for Women (Home Tips for Women) over 9 years ago

Tim, - Thanks so much for commenting on the correction of Tim #45 's comment about the interest deduction.  I could not figure out where he got such low figures, then I realised he was just doing PMI....    not all interest.  

Thanks again!

Posted by Dagny Eason, Fairfield County CT, CDPE Homes For Sale and Condo (Dagny's Real Estate) over 9 years ago

Laura - This would be absurd if this is eliminated or "capped".  Mortgage interest is a huge benefit of home ownership.  Stripping that away just does not make any sense and could make things worse.  The higher income folks already pay the MOST taxes !

Posted by The Somers Team, Real People. Real Dreams. Real Estate. (The Somers Team at RE/MAX Access) over 9 years ago

Great post Laura. Many folks look upon the mortgage interest deduction as a benefit of home ownership. Any change to it would have devastating effects.

Congratulations on the featured post! 

Well deserved!

Posted by Craig Rutman, Raleigh, Cary, Apex area Realtor (Helping people in transition) over 9 years ago

I was going to comment on this blog when I saw it as a featured post. Congratulation! I respectfully disagree with you. South Jersey average income is approximately $45,000 per year. Sometimes that is the total earns of the entire family. I don't like Obama bashing. After 8 years of Bush I think we should give him a chance to fix the mess he was left. I hope we can still be friends.

Posted by Gregory Bain, For Homes on the Jersey Shore (Mezzina Real Estate & Insurance) over 9 years ago

I have been following Lenn's blog on this.

Yes, we need to write our legislatures. Disaster for the housing market and Americans in general.

 

Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) over 9 years ago

I'll give up any sort of deduction or tax credit I would get for having a mortgage or owning a home.  But, I'll only do this if we can have The Fair Tax.

Posted by Eric Boyd, FL Licensed Real Estate Broker / Property Manager (Step One Realty, LLC, 904-469-6335) over 9 years ago

Thanks all for your comments and opinions..

A note to my fellow Little Egg Harbor Realtor, Greg

I was not Obama bashing, I noted it was only a proposal in the President's budget affecting higher income families and individuals, but a proposal that could shake the confidence of home buyers at all economic levels. 

Of course we can still be friends!!!   :-) 

Posted by Laura Giannotta, Your Realtor Down the Shore! (Keller Williams Realty - Atlantic Shore ) over 9 years ago

As a mortgage lender, I still prefer to qualify borrowers based on their income as it is in their present circumstances, not as it may become with a tax deduction. I frequently get questions about the tax deduction on mortgages.  It has been and will remain one of the reassuring parts of taking on such a huge obligation. It gives borrowers the option of reducing their withholding tax to increase their take home income to pay their higher monthly mortgage payment.  That being said, I agree that the credit cannot be eliminated.  A family earning $100,000 per year with an annual interest deduction of $20,000 gets to keep over $5,000 in their budget to spend on property taxes, food, clothing and other necessary items.  Removing the cushion will be a hardship on many families.

There are currently caps in place that limit the amount of interest you can deduct based upon the size of the loan you have.  Any mortgage interest deduction on a principal residence is capped at a loan amount of $1.1 million.  This limitation has been around for a while and has not seemed to have an impact on people's decision to purchase upscale homes.  If the goal is increase tax revenue, lower the cap by $100,000.  This will allow the increase to be borne by borrowers who in most cases can more easily afford it and not those who cannot.

Posted by Andrew Larson over 9 years ago

Thanks Laura for this post. I will do something about it. It is almost un-American to propose something like this. Families who grow up in homes that are owned do much better in society. If we limit this we will effect more than just the amount of taxes that we pay.

Posted by Mark Warner (RealEspace) over 9 years ago

Good note about the majority is now the 1st time homebuyer.

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) over 9 years ago

I question whether a family making $250,000 would be first time homebuyers, but it is possible.  I think the bigger issue is that shifting taxation to families with incomes over $250,000 is just plain wrong. Elimination of the mortgage interest deduction is ludicrous.

Let me show you why.  A family whose income is $250,000 really only takes home about 70% of that after taxes (less if you factor in state taxes).  That brings us to an after tax income of $175,000.  A general "rule of thumb" is to have your housing costs be under 40% of your disposable income.  That would be $70,000 per year.  Let's see, that's....under $6,000 per month.

That's the equivalent of owning an $800,000 home with 20% down and 6,5% jumbo interest.

Now, how many people, especially in the North East and coastal California (where housing is typically more expensive) is this going to affect?  How many people in the rest of the country will it affect.  And who votes more and where are the population centers?

I would venture to say that if Obama tries this, Scott Brown will definitely let his 41st vote be heard loud and clear!!!

Posted by Martin Kalisker, Professional Standards & Legal Assistant (Greater Boston Association of REALTORS) over 9 years ago

Andrew #61 - the cap is actually $1 million.  This has not changed for the 2009 tax year - but maybe it should be inflation based like everything else.

Posted by Martin Kalisker, Professional Standards & Legal Assistant (Greater Boston Association of REALTORS) over 9 years ago

The only way I would be in favor of the elimination of this tax is a very low flat tax or an elimination of the income tax in favor of a national sales tax.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) over 9 years ago

I do not have the figures of how many Americans that pay taxes are using this deduction, but feel very safe in saying that if Washington votes to do this, the taxpayers will vote every one of them out of office.  And, I can't believe that they do not know this and job security in this market is probably something they would like to keep.

Posted by Joyce Windschitl Hercules, MN, FL, WI & CO Mortgage Consultant (Prime Mortgage) over 9 years ago

More stupidity from Washington....I could spend all my time watching the crazies. I'm just exhausted by all the dumb ideas they come up with to further ruin our economy.

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) over 9 years ago

Great letter.  We should all be writing.

My sister lives in Australia where they get no interest deduction.  It's another benefit we get in this country that is slipping away.

Posted by Karen Rittenhouse, Real Estate Investor (www.JKKPropertyInvestors.com) over 9 years ago

That price range is still considered middle class: those are the home business and small business owners that are already struggling, I'm sure.  They want to pass health care and force those small business owners to provide health care for their employees which is a major drain and now take away a tax break on top of that? OUr government is coming up with this stuff for fun now. 

Posted by Kerry Jenkins (Prime Properties) over 9 years ago

Laura...Thanks for the heads up on this issue.

 

Jerry Gray CRB,CRS,GRI,SFR / Allen Tate Realtors / Winston Salem, NC / 336-918-2433

Posted by Jerry Gray, Serving the Triad Since 1980 (Wilkinson ERA Real Estate) over 9 years ago

Tax and spend, tax and spend, spend and tax, spend and tax.

Vote them all out, especially this administration and congress - BOTH PARTIES.

We've been fooled long enough.  Fight back against this out-of-control government.

Look at the Obama budget and its mind-boggling deficit.  Makes Bush look like a miser.

Where is the borrowed and printed money really going?  Does anybody know?

Posted by Mark Cohen, Broker, Eyemark Realty, Gainesville Florida USA over 9 years ago

I hate saying this because it would affect my business as well, but I have to agree with this suggestion, and it's only the 2nd thing I've agreed with our president on. I wouldn't stop there though... the whole tax system is not fair across the board and most deductions should be eliminated so the tax rate could be lowered across the whole gamut. Let's face it, our ship is sinking and we're trying to bail out with soup cans. The longer we wait to rebuild the longer we will all suffer and take our children with us. I know I'm in the minority but I've discovered after all these years that a home is NOT an investment and not intended to be. It is supposed to be shelter against the elements, we've gotten too crazy about where we live... I'm as guilty as anyone, but I have learned to think for myself and not just perpetuate thinking I've been fed all my life... debt free with no deductions is the best way to go.... it's time to return to the old and better ways. ... in my opinion anyway.

Posted by Bob & Bonnie Horning over 9 years ago

Obama's scheme to remove this tax benefit is one of the most ridiculous ideas that a politician has suggested in a long time. With values still declining in many markets, eliminating the tax benefits would essentially make home ownership a very poor investment choice. It would make much more sense for people to rent. If this happens, start looking to buy multi family buildings because there will be a lot of people looking to rent.

Posted by Eric J, Dream Home Financing (Eric J - Dream Home Financing) over 9 years ago

The government seems to be determined to prolong the housing crisis for some reason. How in the world can they think this is going to help?

Posted by Terry Lynch (LAR Notary and Closing Services) over 9 years ago

I not sure to what ever happened to yes we can ,,,, I thought it was about changing things so the guy on the street gets a fair shake not about taking care of corporate america like it has done so well with B of A ,,, taking away the mortgage interest deduction will do more harm to middle income families than what they are already going through.

Posted by Gene perez (Greater Mortgage Solutions & Valley Hills Realty ) over 9 years ago

 If Obama wants it, you know it's got to be harmful to America. I wonder if the folks who put him in office are now happy about the "change."

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) over 9 years ago

Not to get too political here on ActiveRain, but when are politicians going to realize that any kind of increases in taxes are harmful to the country.  We've seen this story before and it always turns out hurting, not helping, the economy.  It does well for the governments coffers, but not for the American people.  I don't care what political party you are in, higher taxes are a bad idea in a recession (or just out of a recession.)

Posted by Matt Robinson, www.professionalinvestorsguild.com (Professional Investors Guild) over 9 years ago

Elimination of the mortgage interest deduction will remove thousands of dollars from the pockets of homeowners who are already struggling. This will cause more foreclosures which will deepen and prolong the recession.

Posted by Dave Halpern, Louisville Short Sale Expert (Keller Williams Realty Louisville East (502) 664-7827) over 8 years ago

Participate