RISMEDIA, March 2, 2009-The Mortgage Bankers Association (MBA) raised concerns about the limitation on itemized deductions in the President’s budget and expressed support for the budget increase in the Department of Housing and Urban Development (HUD).
The limitation on itemized deductions for those taxpayers earning over $250,000 (joint) and $200,000 (single) will reduce the itemized deductions related to home mortgage interest, real estate taxes on primary residence and mortgage insurance. Under the plan, taxpayers over the income limits will receive tax benefits from their itemized deductions at a maximum tax rate of 28% (instead of the higher incremental tax rate commensurate with their income tax bracket).
“The MBA opposes any additional cap or reduction in the mortgage interest, insurance and homeowner real estate tax deduction,” said MBA’s Chairman, David G. Kittle, CMB. “Given the current state of the market, this proposal could have an adverse effect on a market that is already in trouble; and this is not the time to reduce incentives for buying or refinancing a home.”
The Administration’s FY 2010 budget funds the Financial Stability Plan and Troubled Assets Relief Program (TARP), two important economic stability initiatives supported by the MBA. Under the proposal, HUD would receive an overall budget increase of over 18% to $47.5 billion. An additional $1 billion would be utilized to launch an Affordable Housing Trust Fund to develop affordable housing for very-low income households.
“MBA strongly supports the increased budget request for HUD, which includes foreclosure prevention efforts,” said Kittle.
The Association looks forward to reviewing additional details of the administration’s proposed budget and will work closely with Congress as it considers the FY 2010 budget resolution and appropriations bills.
For more information, visit www.mortgagebankers.org.
