Earlier this month, HSH.com published an article called “Real estate’s fiscal cliff: 5 items to watch out for.” The number one item on that watch list was the pending expiration of the mortgage interest deduction. The deduction was a highly debated before and during the election, yet still remains unresolved.

Since the topic is still under intense debate, we wanted to examine how former-governor Mitt Romney’s idea for solving the deduction debate would impact American homeowners.

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With the political season heating up, it should come as no surprise that the public is increasingly tying housing matters to the next election.

What may come as a surprise is the level of opposition to the mortgage interest deduction and other traditional write-offs.

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The mortgage interest deduction is back in the news.

The super committee

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What would your reaction be if lawmakers decided to do away with the mortgage interest deduction? For certain homeowners, tax season, along with all the usual stress it brings, means the opportunity to deduct some of the interest they paid on their mortgages all year long. However, there have been some discussions, both on Capitol Hill and beyond, of doing away with the famed mortgage interest deduction as a way to correct this country’s ever-growing deficit.

As you might anticipate, many homeowners and professionals are up in arms over the idea, while others think eliminating the deduction could be a reasonable solution.

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Saturday

“Homeowners: Are you ready for tax time?” Read the rest of this entry »

The bursting of the housing bubble and the continued drag it has placed on our overall economy has caused many of us to debate, or at least question, where we stand on the American dream and its relation to homeownership.

Late last year we wrote a post titled, “Is renting the new American dream?” A few months back we wrote about how “…the American dream of home ownership turned into a nightmare of debt and foreclosure” (a quote from David Wessel of the Wall Street Journal). Each of those posts questioned the old ideal that, as Americans, homeownership is something we all should strive for and is a gauge of our overall success. Maybe most of us are better as as renters as opposed to owners.

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Saturday

“Elimination of Mortgage Interest Deductions Gains Steam“:

Economist Mark Zandi encouraged the most unlikely group of professionals to jump on the ‘eliminate mortgage deductions’ bandwagon: Realtors. Much to their surprise, or should I say chagrin, Zandi told his audience that the housing sector has received enough support, “it’s time to give back.”

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Economist Mark Zandi encouraged the most unlikely group of professionals to jump on the ‘eliminate mortgage deductions’ bandwagon: Realtors. Much to their surprise, or should I say chagrin, Zandi told his audience that the housing sector has received enough support, “it’s time to give back”:

And the industry shouldn’t be shy about its support for such action either, Mr. Zandi argued Wednesday in Washington. Rather, it should “get out ahead of this” and “lead the way,” he said.

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Let’s review this week’s blog posts with a short excerpt from each (the titles will link to the full post):

Sunday:

“Veterans: Homebuyer Tax Credit Good for Another Year“:

Despite the overwhelming support for a second extension of the homebuyer tax credit from the readers of this blog, to this point, lawmakers have expressed little to no indication that there will be another extension.

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Existing and mounting federal deficits have changed the way many lawmakers and economists feel about mortgage interest deductions. The once sacred and holy tax break for homeowners is now at risk of being eliminated, at least for some.

Proponents of mortgage interest deductions are of the opinion that the tax break increases homeownership, and thus enriches communities. The feeling is that the deduction is an added benefit that allows homeowners to relieve some of the financial stress of owning a home; homeowners depend on it: Read the rest of this entry »