From today's Washington Post:
"These include reducing the size of mortgages Fannie and Freddie can purchase, from $729,750 now to $625,500 by this fall. It also includes phasing a 10 percent down payment requirement for the companies. Finally, it includes raising fees the companies charge to insure loans.
The administration also suggested scaling back FHA, which caters to first-time homebuyers with low down-payment options. It said it wants to reduce the size of loans that FHA can provide, increase fees by a quarter percentage point, and potentially raise the down payment requirement from 3.5 percent now to 5 percent in the future.
The report also emphasized the importance of rental housing for low and moderate-income communities."
This got me thinking. One of the recommendations of the Simpson-Bowles Commission was to eliminate the mortgage interest deduction, which was somewhat scaled down yet still retained in Ronald Reagan's Tax Reform Act of 1986. The question is how do you get rid of a sacred cow unless you convince people it is no longer sacred? Could this be the first step to making that happen?
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