Home Tax Breaks Help Homeowners And Are At Risk With The Fiscal Cliff

GOP Fiscal Cliff Counteroffers White House Proposal

Is the Fiscal Cliff just a speed bump on the road to a real crisis - bigger than housing?

Yesterday, House Republicans put forth a $2.2 trillion "fiscal cliff" counteroffer to President Barack Obama, heralded by House Speaker John Boehner. The White House immediately rejected it saying it contains too few specifics on how funds would come from closing loopholes and deductions, as Boehner proposed, versus Obama's way by means of raising taxes.

According to Boston Globe, yesterday, House Republicans put forth a $2.2 trillion "fiscal cliff" counteroffer to President Barack Obama, heralded by House Speaker John Boehner. The White House immediately rejected it saying it contains too few specifics on how funds would come from closing loopholes and deductions, as Boehner proposed, versus Obama's way by means of raising taxes. Hoping congress would "respond in a timely and responsible way", Republican are calling for raising the eligibility age for Medicare, lowering cost-of-living hikes for Social Security benefits and bringing in $800 billion in higher tax revenue.

Many are questioning where tax hikes will reach, and what will happen to the American dream of homeownership, if government keeps growing faster than the private economy.

Critical To Helping Homeowners

Housing market tax breaks have support across party lines.

In nearly identical letters to the Senate Committee on Finance and the House Ways and Means Committee, the two organizations argue that the Mortgage Debt Forgiveness Relief Act is supported across party lines and is “critical to helping homeowners and communities struggling with the ongoing foreclosure crisis.”

Republicans Are Disappointed In White House - Says Going Over The Fiscal Cliff Is Serious Business

The Center for Responsible Lending, a nonprofit group advocating for homeownership, and the Financial Services Roundtable, home mortgage lenders from the nation’s largest financial institutions, united in asking Congress to extend the Mortgage Forgiveness Debt Relief Act, which will otherwise expire shortly on December 31.

Call For Positive Housing Polices

Our tax policy should not result in bad housing policy that will prolong a foreclosure crisis that has already gone on for too long.

Home builders are leading the housing market recovery which is leading the economy through increases in home equity and the increasing number of sold homes. the two organizations express concern that allowing the Mortgage Forgiveness Debt Relief Act to expire at the end of the year will hinder the budding recovery. “Our tax policy should not result in bad housing policy that will prolong a foreclosure crisis that has already gone on for too long,” the groups state in their co-authored letter to lawmakers.

“If the act expires, you will be asking people to pay cash on an income they never received and with cash they don’t have. I think that is well-understood, especially by members of the Florida delegation.” ~ John DiBiase, communications director for the National Association of Realtors’ government affairs office.

Zillow Says We Are Poised For A Bright Housing Year

Spencer Rascoff, chief executive officer of Zillow Inc., talks about the U.S. housing market on Bloomberg and says it has come through the worst and that more people say they are ready to buy a home now than in the last five years. Zillow did an analusis that included a 12 month increase. Home shoppers are back. Home values are going up; and homes are selling. He projects home prices will go up 2% in the next year. As a recently IPO's company, are you selling out.

Congressional Budget Office

The government was a major contributor to the housing bubble and burst, so it’s only fair that it extend the act to help households that have been absolutely crushed by the market.

At the same time, the Congressional Budget Office estimates extending the relief could cost $1.3 billion in lost revenue to the federal government during a period when it is “desperate for money,” said Anthony Sanders, a George Mason University real estate finance professor who is in favor of an extension. “People are already suffering enough who go through default and foreclosure, and to suddenly give them a tax bill is incredibly cold-hearted,” Sanders said. “The government was a major contributor to the housing bubble and burst, so it’s only fair that it extend the act to help households that have been absolutely crushed by the market.”

Dan Mitchell - Number of Entitlement Programs Is Out of Balance

"If you add up the amount of money that the government is promising to spend for entitlement programs in the future and compare that figure to the amount of revenue that the government projects it will collect for those programs, the cumulative shortfall is more than $100 trillion. The real crisis is the ticking time bomb of entitlement programs and the welfare state." according to Dan Mitchell. Many are questioning where tax hikes will reach, and what will happen to the American dream of homeownership, if government keeps growing faster than the private economy.

Homeowners Do Best Saving For Home Expenses And Protecting Home Equity

Congress is spinning to the final 28 days left to head off an economically toxic combination of tax increases and budget cut hits. No one can say exactly what to expect if we go over the cliff. Two things are sure, we will know shortly and homeowners who have been cautious to savor a saving account will be in the better place. Additionally, some homeowners wonder how the new home sales tax, which is also implemented on January 1, 2013, or which homeowners who sell their homes will be taxed.

What The Housing Market Is Up Against

The major threats to the market at this juncture, the analysts say, are

1) potential for a new American recession (brought on by complications from the fiscal cliff and the potential of a partial euro-zone break-up)

2) the risk that properties in the shadow inventory will flood the market, diving home prices downward.

Contact Destiny Homes to take advantage of today's opportunities to build a home or begin a major home renovation project in the Minneapolis and St Paul housing market. Call us at 952-923-5706. We are passionate about supporting homeonwers and helping you invest in home.

Homeowners Scrambling Like Maniacs To Close

“We’re scrambling like maniacs to get it closed,” Brink said. “I have some anxiety, but I’ve pulled off miracles before.” Jeff Shingledecker listed his Palm Beach Gardens home as a short sale in April. He considered a loan modification that would increase the term of his mortgage to 40 years but decided to do a short sale after learning about the debt relief act. After several offers, he said he was “fortunate enough” to close the deal in October and expects to have about $108,000 of debt forgiven.