Friday Five: Obama’s Budget Challenges Mortgage Deduction for Some

New Obama budget proposes to limit the mortgage interest deduction; Congress makes a final push to pass a flood insurance extension.

Just a week after introducing a large-scale refinancing proposal for underwater home owners, President Obama’s proposed budget would reduce the mortgage interest deduction for many, undermining efforts to bolster the housing market at time when the housing market needs less uncertainty. At the same time, despite a legislative impasse in Washington, some of the President’s refinancing proposals may become reality. Read more in this week’s headline roundup.

HouseLogic: Obama Budget Plan Curbs Mortgage Interest Deduction for Some

President Obama’s $3.8 trillion FY 2013 federal budget would limit the mortgage interest deduction for families with incomes over $250,000 — a change that would harm home owners and potentially lower home values at all price levels, says Moe Veissi, president of the NATIONAL ASSOCIATION OF REALTORS®.

Los Angeles Times: Parts of Obama’s Mortgage Refinancing Package Will be Reality

The proposals that require Congressional approval have little chance, but some of the president’s ideas can be enacted administratively and could begin affecting consumers within weeks.

Sioux City Journal: Removing Home Owner Benefits is Counterproductive

When candidates for public office support the elimination of modification of certain home ownership benefits as a cost-cutting means, that action could cost them the election.

Property Casualty: Push Begins in Earnest for NFIP Extension with Reforms

Forty-one signatures have been secured on a letter from senators to the Senate leadership urging prompt action on legislation reauthorizing the National Flood Insurance Program. The program’s latest extension expires on May 31.

Reuters: Bernanke Urges Action to Heal Housing Markets

Federal Reserve Chairman Ben Bernanke issued a call to action during last week’s builder conference in Florida to restore U.S. housing markets, saying depressed house prices and sales are a serious drag on the economic recovery.