Here is some info thanks to the National Association of Realtors.
Then below is a blog Re-posted wiit thanks to Stephanie Roulier
Posted on Friday, February 27, 2009 8:06:50 PM by free-n-TX
February 26, 2009 - President Obama released his budget proposal this morning. 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 set of 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.
Every time you watch the news, open your homepage on the computer or read a newspaper, we're told home sales are declining and that last month was even worse than the previous month which was the worse in thirty-odd years. There is still no end to falling prices and even amazing rates, like 5% mortgages are not getting people to sign on the dotted line. Then on Thursday, President Barack Obama announces in his proposed budget, that the most sacred of tax deductions, (the mortgage interest deduction) will be reduced for certain homeowners.
The timing of this proposal couldn't be worse. I believe we need every incentive available for people to make a home purchase. So, Joe Jones, down the block, is making $209,000 a year and wants to purchase a house, thereby supporting the economy, the real estate industry and the construction industry and you're going to penalize him by allowing him a smaller deduction on his taxes? We need as many people buying homes as possible. If it takes incentives, LOWER tax rates, or one-percent loans (with no adjustable rates to go up or balloon payments) or prices to finally bottom-out, so be it. Let's not penalize Joe Jones for being "rich" (and when did that become a dirty word?!?).
I realize that President Obama's proposal must pass Congress and even with an approval rating hovering about 12%, I hope cooler heads in Washington will prevail and the mortgage interest reduction remains as is.
And don't even get me started about lowering the deductions for charitable contributions!