Friday, December 21, 2012

The Mortgage Tax Deduction

I wrote to Senator Rubio re: the fiscal cliff and the possibility that Congress may take the mortgage interest tax deduction off the books. This is his response. I think it is classic pol-babble.

Dear Mr. Vass,

 Thank you for contacting me with regard to the housing market. This is an important issue for Floridians and I appreciate the opportunity to discuss it with you. As you know, misguided government policy fueled excesses in the housing and real estate markets throughout the 2000s, leading to a peak in the market in 2006 and a subsequent crash. The losses to American homeowners were enormous. Families across the country lost more than thirty percent of their home's value, in many cases leaving them underwater on their mortgages, and many have still not recovered to this day.

Nationally, the housing market is beginning to recover, albeit slowly. Though the worst may be passed, homeowners continue to struggle. Policymakers must learn the correct lessons from the recent crisis and not repeat mistakes. Past promises of assistance have only resulted in financial ruin for millions of Americans. Federal legislation passed during the downturn served only to make matters worse for Floridians by prolonging the negative impacts of government favoritism.

 The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed under a Democrat-led House and Senate and signed by the President in 2010, imposes stringent regulations on small and community banks, the most important lenders in a housing market recovery. One community bank president described the Dodd-Frank regulations as, "Costly, both in time and personnel to implement," and, "confusing to our [customers]." By placing burdens on the lenders and creditors most vital to recovery, this law will continue to hurt homeowners and families in Florida.

 Additionally, the Federal Housing Authority (FHA) and the government sponsored enterprises (GSEs) known as Fannie Mae and Freddie Mac have served as short-term band-aids for the housing market and further distort the true value of Americans' homes. The FHA recently said it may need a federal bailout of as much as $93 billion. With more than 90 percent of all mortgage originations backed by the government, a larger government role in the market and more bailouts are exactly the wrong solutions for taxpayers.

 Floridians know that if the government created a mess of the housing market, it cannot be trusted alone to be the solution. We cannot ask our children and grandchildren to finance Washington's risky lending and irresponsible government policies by accumulating more debt. Fannie Mae and Freddie Mac must be wound down and reformed, allowing a fair market for housing to return in the private sector. The federal government must learn the lessons of the Great Recession and allow lenders and borrowers to make informed decisions without excessive government meddling.

 A healthy housing market is a goal shared by all Floridians. Restoring choice and an open marketplace in housing will revive economic growth for all Americans. I will keep your suggestions and thoughts in mind when considering issues that will impact the housing market in Florida and the nation as a whole. It is an honor and a pleasure to serve the people of Florida.


 Marco Rubio United States Senator

 I've heard so many stories from middle class Americans about their financial struggles and accomplishments. As the result of an empowered middle class, I want to continue to be your voice in the Senate and give you a seat at the table. I hope you take a minute to visit my website and tell me more about your story. Each week I provide a weekly update on issues in Washington and ways in which my office can assist the people of Florida. Sign up here for updates on my legislative efforts, schedule of events throughout Florida, constituent services and much more.

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