Mortgages

Congress Won’t Cut Mortgage Interest Tax Break

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Congress Won't Cut Mortgage Interest Tax BreakU.S. House Majority Leader Eric Cantor, speaking before the Richmond Association of Realtors in his home state of Virginia, said that while the mortgage interest tax deduction may spring up in conversation about saving the federal government money, it’s unlikely to face the ax, according to a report from political news site The Hill. Instead, he said Republicans were looking for a way to reform Fannie Mae and Freddie Mac in a way that would not damage the real estate industry.

“Our goal is to create an environment for the private sector to engage in lending again, where the federal government has filled a void in the market through Fannie and Freddie and FHA,” Cantor said, according to the site. “We need smart regulations for mortgage applications that mitigate risk but do not close the doors to homeownership to responsible borrowers.”

Republicans have been on a campaign to reduce government deficit spending and have kicked around a number of ideas to save money, including the repeal of the mortgage interest tax break. Doing so would have saved the federal government billions, but would also have been wildly unpopular and cost consumers thousands.

[Related article: Trimming Mortgage Deduction for the Wealthy Comes Under Fire]

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  • http://www.ditech.com Ditech Home Loans

    I’m scratching my head wondering why the government would do so much to support the housing market and then consider pulling the rug out by eliminating the mortgage interest tax break.

  • wayne mchargue

    The deduction is one of the reasons why investors buy and rent properties. If it is lost rental costs will increase dramatically. It will price many at the lower end out of the market and the government, which is so bad at providing housing, will be in it big time. This is a proposal we should not even consider. The housing market needs stimulation now not disincentives like this.

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