We want to raise peoples awareness that this proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values.
A small section of President Obama's sweeping budget plan has the potential to become a major impediment to a recovery in real estate markets across the nation.
As currently drafted, the plan changes the Mortgage Interest Deduction by reducing the amount of mortgage deductibility on families earning over $250,000. This proposed change in the Mortgage Interest Deduction will result in further erosion of home prices and home values. If this proposal is enacted it will lead to a new round of price depreciation, 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.
As taken from a letter by Charles McMillan
2009 NAR President to its members.
1. Will further erode home values
2. Will cause a second credit crisis
3. Will cause greater stress on bank balance sheets