By Barry Habib
Chief Market Strategist for Residential Finance
Founder and CEO of MBS Highway
Don’t axe the home mortgage interest deduction. Change it.
As Congress continues to wrestle with how to trim spending, a hotly debated topic is the federal tax deduction for home mortgage interest. And it’s no wonder why, when you consider that the home interest deduction is estimated to cost the federal government $100 billion a year. As a reference point, the fiscal cliff fiasco and hike in tax rates, increased revenue to the government by $62 billion a year. And the highly publicized sequestration is about $85 billion in cuts.
This makes the mortgage deduction a juicy target for elimination ─ especially since legislators feel they will be shielded from lash backs from their constituents by the following surprising statistics: