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 percent (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 percent 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.

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The Mortgage Bankers Association (MBA) is the national association representing the real estate finance industry, an industry that employs more than 280,000 people in virtually every community in the country. Headquartered in Washington, D.C., the association works to ensure the continued strength of the nation's residential and commercial real estate markets; to expand homeownership and extend access to affordable housing to all Americans. MBA promotes fair and ethical lending practices and fosters professional excellence among real estate finance employees through a wide range of educational programs and a variety of publications. Its membership of over 2,200 companies includes all elements of real estate finance: mortgage companies, mortgage brokers, commercial banks, thrifts, Wall Street conduits, life insurance companies and others in the mortgage lending field. For additional information, visit MBA's Web site:  www.mortgagebankers.org.