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Daily Real Estate News  |  December 3, 2010  |   Deficit Reduction Commission Endorses Plan
President Obama's deficit commission voted 11-7 in support of its final report, which was released Wednesday. However, the panel fell short of the super majority (14 out of 18 votes) needed to automatically send the recommendations to Congress.

The purpose of the National Commission on Fiscal Responsibility and Reform's recommendations is to identify spending cuts and tax changes that would cut $4 trillion in debt over the next decade. A scaling back of the long-standing mortgage interest deduction (MID) for home owners was among the proposals.

Specifically, the commission recommended turning the mortgage interest deduction into a tax credit, capping eligible mortgages at $500,000, and eliminating tax benefits for second homes and home equity loans.

Real estate industry groups reacted with expected concern over how such changes could impact the already fragile housing industry. In a statement, National Association of REALTORS® President Ron Phipps said, “As the leading advocate for housing and home ownership issues, NAR firmly believes that the MID is vital to the stability of the American housing market and economy.”

Changes to the MID could bring down home prices just when the housing market is beginning to seeing stability, Phipps said. NAR research estimates that home values could erode as much as 15 percent if the changes to the MID were put into law.

"This would negatively impact home ownership for millions of Americans, including those who own their homes outright and have no mortgage," said Phipps.

Take action: NAR has issued a Call for Action encouraging REALTORS to make quick phone calls to lawmakers asking them to defend the MID from any cuts or reduction.

- Erica Christoffer, REALTOR® Magazine

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