California Association of Mortgage Brokers Calls On President to Reject Proposed Cut to Mortgage Interest Deduction.

SACRAMENTO, Calif. -- California Association of Mortgage Brokers today issues the following statement in response to recommendations made by President Bush's tax advisory panel to cap the amount of interest homeowners can deduct from their taxes.

"The mortgage interest deduction (MID) has been a longtime standard of American tax policy," said John Marcell, state president for California Association of Mortgage Brokers. "The proposed action to cut deductibility will greatly erode the value of homeownership, significantly reduce housing affordability, and discriminate against California homeowners, acting as a direct and real tax increase for millions of hard working middle class Americans."

Currently, taxpayers can deduct all interest paid on a mortgage up to $1 million. In California's high-cost housing market, the proposal amounts to thousands of dollars in higher taxes for working Californians, while discouraging home ownership.

"Cutting the amount of interest California homeowners can deduct contradicts the goals set by President Bush's plan for federal tax reform," said Michael Faust, chair of Government Affairs for the California Association of Mortgage Brokers. "Instead of fairness, this tax proposal would devastate homeownership, discriminate against working Californians and destroy the viability of communities."