Up to this point, NAR and President Obama have been getting along swimmingly. The administration has been rolling out programs and proposals in an attempt to keep homeowners in their homes and stabilize home prices. NAR smiled repeatedly.
Then Barack Obama looks to tinker with one of NAR’s most sacred, untouchable, most holy issues: The mortgage interest deduction (MID).
As part of the budget sent to Congress, the President is proposing to change the MID regulations for homeowners who file joint returns and earn $250,000 or more annually ($200,000 per year if filing single). The short version, according to NAR, is that proposed changes to the MID will counteract the initiatives contained in the recently-passed American Recovery and Reinvestment Act of 2009, the proposed Homeowner Affordability and Stability plan, and other measures intended to help the floundering housing market.
Here are some other consequences of changing the MID, according to NAR:
- further erosion of home prices and home values
- 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
In their own words, NAR is “prepared to use its formidable array of resources against its enactment.” See what they’re doing about it already.
Looks like the VARbuzz blog brawl won’t be the only battle being waged this spring.