A tax deduction overhaul may be in store for many homeowners across the country. President Obama has requested a bi-partisan committee take a look at the nation’s finances and discuss options that would provide the federal government the opportunity to lower its debt.
One suggestion made by the committee is to cut a number of tax breaks, one of which allows homeowners to deduct the interest paid on their home loan. Eliminating such a deduction would save the Treasury Department roughly $131 billion per year, according to Informa Research Services.
Ron Phipps, president of the Realtor’s group, told CNN Money "Any changes to the [deduction] now or in the future could critically erode home prices and the value of homes by as much as 15%."
Others, such as Michael Berman chairman of the Mortgage Bankers Association, believe removing such a deduction "would immediately stop in its tracks any stabilization we are seeing in the housing market and would effectively increase the cost of homeownership for millions upon millions of people."
The bi-partisan committee's ultimate goal is to generate enough ideas to bring down the national deficit that will spark a "national converstion" to find a plan that will work the best.