One of the reasons there is talk about getting rid of the mortgage interest deduction is

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38. well then why bother with mortgages at all? just pay cash. after all, you could lose your job.

this is truly facile. virtually ALL lending assumes that the future has something to do with the past.

business lending presumes the company will continue to produce revenue in some relation to what it has in the past, personal lending presumes you have the ability to pay (meaning income) in some relation to what you have had in the past, etc.


note that we're also not talking about all other things being equal. it's not like losing a tax break is the ONLY bad news that any homeowner has had these days. we're talking about taking away their biggest deduction IN ADDITION TO slashing the value of a house that's ALREADY been slashed in value IN ADDITION to probably no raise if they're lucky to still have a job IN ADDITION to perhaps a hike in their property tax as municipalities have been getting squeezed.

the bottom line is that many, many homeowners, including many who put a responsible 20% down are now underwater on their mortgage, and may be in trouble due to many factors. taking away their biggest deduction, one that's been a vitual institution for decades, at this time, is really piling it on.