The Law Of Unintended Consequences
The 8000 Tax credit is great. Forcing the banks who take TARP money to actually WORK with people to keep them in their homes is great. But NAR and every Realtor everywhere is going to be against this part of the budget that we only learned about today. Anything that puts downward pressure on home prices IS NOT GOOD.
Iâ€™m sure weâ€™ll be asking you to call or write in the next few days.
Dear Fellow REALTORÂ®,
You may have seen news reports about President Obamaâ€™s budget proposal that was released today at 11:30 AM Eastern Time. A small section of the sweeping budget plan has the potential to become a major impediment to a recovery in real estate markets across the nation. NAR is 100% opposed to the provision that modifies the Mortgage Interest Deduction and is prepared to use its formidable array of resources against its enactment.
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 you read this NAR is launching a multiphase plan of action to eliminate this provision from the budget plan. In the next 24 hours, NAR will be expressing our concerns directly to President Obama, to all members of the United States House of Representatives and the Senate, placing advertisements in the publications read by Washington, DC decision makers. Additionally, NAR will be forming a coalition with other groups affected by this proposal.
This communication is the first part of our response, we will continue to update you as the situation and events warrant.
Charles McMillan, CIPS, GRI
2009 NAR President