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The Straw That Breaks the Camel’s Back?

The KCM Crew tries its best to be unbiased when they disseminate information. I respect them for that and know they are providing a great service to sellers, buyers and industry professionals.  However, today I want to use this blog to espouse a particular point of view, my view – that homeownership in this country is under attack and we must defend it.

The latest salvo shot across the bow of every current and future homeowner in this country is the concept that somehow the mortgage interest deduction is unfair to Americans. HousingWire reported on this issue last week:

The National Commission on Fiscal Responsibility and Reform, proposed limiting the mortgage interest rate deduction on taxes, one of the primary incentives for owning a home.

President Obama created the bipartisan commission in February to provide options on overhauling the tax system and reducing the national deficit. According to a November report, one option excludes citizens from deducting interest payments on second residences, home equity loans or mortgages over $500,000.

Today, I want to expand on just two reasons this makes no sense.

1. Homeownership is a Major Part of the ‘American Dream’

It has been proven that homeownership is critically important to American culture. A home is more than just a financial investment. It is a parents’ investment in their children. It is a family’s investment in their community. It is the people’s investment in America. With housing attempting to recover from its most trying time, it seems ludicrous to remove one of the most enticing reasons to own a home.

2. This Could Lead to another Wave of Foreclosures

Even if we just look at this from a purely financial perspective, it makes no sense. There are thousands of families struggling to pay their mortgage every month. Many of these homes are in a negative equity situation. Many in this situation have already decided to strategically ‘walk-away’ from their mortgage obligation. Others are sacrificing in different areas of their families’ lives in order to continue to pay their mortgage. Taking away the mortgage tax deduction could be the straw that either financially or emotionally breaks that camel’s back. How many new foreclosures will be created? How will that impact the values of neighboring properties? This makes no sense financially.

What Can You Do?

We can no longer allow certain people to decide that homeownership is not important to the make-up of this country. We must have our voices be heard. If you are a homeowner, or dream to someday be one, contact your elected officials immediately.

If you are a Realtor, please do the same but also support RPAC. Personally, I have been a strong supporter of RPAC for years. However, I never felt compelled to ask others to also show support. At this time in history, it is every Realtor’s responsibility. I realize times are tough. But please sacrifice a small portion of your next commission check. Don’t have a check coming anytime soon? Then go home and search the cushions of your couch for loose change; check the ash tray in your car for a dollar or two. Every little bit will help.

If you believe in the concept that homeownership is a major part of the American Dream, we must defend it!!


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6 replies
  1. Philip Gleason
    Philip Gleason says:

    Ever element of this society is under assault to find the money to pay for all of the programs we have allowed to go on. We, as a people must come to the conclusion that it is not sustainable and government must get smaller and out of our way.

    Reply
  2. Jim Flanagan
    Jim Flanagan says:

    Steve,

    I’ve enjoyed reading your blog for many months now and really admire your, and your crew’s integrity, as you share your knowledge in the most objective forum I have found on the web.

    That being said; I couldn’t agree with you more! We, as an industry and as a nation, need to “show” our elected officials that they “represent” us, their constituents, and that trust should not be taken for granted nor taken lightly. I believe the timing couldn’t be better for us to raise our voices; the mid-term elections are still fresh, “lame duck” sessions are in effect and the real estate industry is in convention mode.

    I, for one, pledge to “do my part”; starting today! Thank you, Steve and KCM.

    Jim Flanagan, GRI, e-PRO
    Coldwell Banker Flanagan Realty

    Reply
  3. David Howell
    David Howell says:

    Great job Steve!

    The fact that the potential elimination or reduction in the mortgage interest deduction is even being discussed puts a chill on an already slow real estate market. Doing this now could, indeed, be the straw that breaks the camel’s back.

    We would all benefit from a little consistency. Five years ago, the American Dream of owning a home was such an important policy imperative that people who clearly could not afford a home were encouraged to buy anyway. The loose-to-nonexistent qualification standards helped create the enormous problems we’re all dealing with today. So now they’re contemplating a 180 degree turn to discourage home ownership.

    As usual, you’ve got it right Steve. Home ownership is central to the family, to the community, to our entire culture. Anything that heads us in another direction is, quite simply, the wrong thing to do.

    David Howell, EVP and CIO
    McEnearney Associates, Inc.

    Reply
  4. Mark Brian
    Mark Brian says:

    This is not just important for RE professionals, but for all Americans. This is just another attack in the war on the middle class. I am involved in RPAC but I feel that this fight is going to take getting people outside of the real estate industry involved.

    Reply
  5. Carla Haight
    Carla Haight says:

    Hi Steve:

    I for one am ambivalent about the mortgage interest deduction. Do I like to get it? Of course. But it is not the reason I own a home.

    Many people I know do not pay RPAC dues for NAR for the very reason that NAR has been protecting the mortgage interest deduction.

    I believe that we are being taxed to death, for health care, for inheritance, for capital gains, because the sky is blue , because it rains and because the sun shines.

    I believe that if we were to pass a Fair Tax, we would be able to cash in on all the money that is spent by illegal aliens, drug dealers, foreigners who visit us and spend money here, etc. I think that government does not listen when we say no and I for one would rather we have a Fair Tax than fall on our sword for the mortgage interest deduction.

    Respectfully.

    Carla

    BTW, I love your common sense approach to the news and statistics regarding the housing industry.

    Reply
  6. Sara Bonert
    Sara Bonert says:

    “Do I like to get it? Of course. But it is not the reason I own a home.”

    I would disagree and say that it is a major influencer as to why I own verses renting. I am married, both employeed (not a small buz owner) with no kids. Real estate is the only substantial tax deduction we are eligible to recieve.

    Reply

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