Chance Gates' Blog

An initial draft proposal for reducing the federal deficit that suggests cuts to the mortgage interest deduction is thin on details and will likely change many times before it’s released in any final form, according to NAR.

The New York Times Wednesday published part of a leaked draft by the co-chairs of President Obama’s Deficit Reduction Commission; the commission’s report won’t be released until Dec. 1 at the earliest and will likely look very different from the leaked draft, NAR analysts say. Therefore, early reactions to the plan are pure conjecture, say NAR analysts. In a statement sent to association leaders late Wednesday, NAR said media reports that the commission has recommended reducing the mortgage interest deduction are false.

The White House itself said in a statement released Wednesday that the draft is “only a step in the process toward coming up with a set of recommendations.” The White House quote was included in a Nov. 11 report in the Washington Post.

Obama created the Deficit Reduction Commission earlier this year to recommend how the federal government can balance the budget by 2015, not counting interest on the national debt. The commission consists of 18 members, six members selected by the president and 12 members selected by Congress. The co-chairs, who released their initial thoughts yesterday, are retired Wyoming senator Alan Simpson and former Clinton chief of staff Erskine Bowles.

What the actual report will look like is impossible to know at this point, because 14 of the 18 members at a minimum must agree to the recommendations before the report can be released. Presuming commission members agree or all or parts of a plan, it would still have to work its way through congressional hearings before Congress would take any action. A reform of similar scope, the Tax Reform Act of 1986, was in the works for more than two years before it was signed into law, pointed out Linda Goold, NAR Director of Tax Policy.

One congressional leader who has made clear the initial draft proposal won’t fly if left unchanged is Rep. Nancy Pelosi (D-Calif.), who remains House Speaker until early 2011, when the new Congress convenes and the Republican members, now the majority party in the House, name their speaker. Among the proposals Pelosi calls “simply unacceptable” are changes to Social Security benefits.

For the real estate industry, any changes in incentives around home ownership, which have been around for generations, would raise considerable concern because of the core role of home ownership in fostering communities and social stability, and in building household wealth.

As CNN, ABC, and NPR political commentator Donna Brazille has said, “For generations, the government has provided federal incentives to help families fulfill the dream of home ownership. . . The one thing that Americans aren’t cynical about is the promise of the American Dream and of home ownership’s role in that dream. We should do all we can to preserve and protect home ownership and the American Dream for today’s home owners as well as future generations.”

www.realtor.org Source NAR

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog. Please feel free to use my back door to the MLS and search the houses available in the Reno/Sparks and most Northwest Nevada neighborhoods. I can be reached by email @ chance@ballard-company.com or  http://www.myspace.com/chancegates .  You can also follow me at http://www.twitter.com/chancegates .  If you are behind on your house payment and looking for a loan modification, go to making homes affordable to request a modification.  If the modification fails, contact your local real estate professional to help short sale your home.  To make sure there is no deficiency judgment a homeowner might find it necessary to hire an attorney. For a free copy of my blog titled  “5 Steps For Reno/Sparks Homeowners To Prevent Foreclosures” go to my about page http://chancegates.com/about and ask for more information on preventing foreclosures.

After a close brush with a deadline that could have impacted tens of thousands of home buyers, the U.S. Congress last night passed an extension of the Home buyer Tax Credit closing deadline.

The extension is included in the Home Buyer Assistance and Improvement Act (H.R. 5623) and will prevent as many as 180,000 home buyers from losing their eligibility for the tax credit through no fault of their own. These households had home purchase contracts pending as of April 30 and had until June 30 to close on their purchases to claim the federal tax credit. Under the legislation that passed last night, these households now have until September 30 to close.

The NATIONAL ASSOCIATION OF REALTORS® supported extension of that closing deadline because buyers are experiencing delays in getting their financing closed. The delays are the result of the large number of transactions that are short sales, which can take a long time to close, and the rush of transactions lenders are processing from buyers submitting contracts before the April 30 contract deadline.

The legislation, which now goes to President Obama for signature, is designed to create a seamless extension of the closing deadline; there will be no gap between June 30 and the date the President signs the bill into law.

NAR worked closely with congressional leaders on both sides of the aisle in supporting lawmakers’ passage of the legislation, which the association says will help provide additional stability to real estate markets across the nation.

Separately, the U.S. Senate also last night passed the National Flood Insurance Program Extension Act of 2010 (H.R. 5569), which extends the National Flood Insurance Program until September 30. This will allow home purchases in the 100-year floodplain to move forward. The House passed the bill last week.

When signed into law by the President, the bill, which will apply retroactively, will cover the lapse period from June 1 to the date of enactment of the extension. Without flood insurance, households buying homes in the 100-year floodplain cannot obtain mortgage financing.

More information on both pieces of legislation is at REALTOR.org.

Source: NAR

As a Reno/Sparks real estate professional, I encourage all questions and comments on the Reno/Sparks real estate market or any of the articles posted in this blog.  You can email me @  chance at ballard-company.com or http://www.myspace.com/chancegates

Related articles by Zemanta

• Congress approves tax credit extension (lansner.ocregister.com)