- Mortgage applications could be delayed if the lender can't verify IRS data.
- Some lenders may even need to verify your Social Security number.
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Bill proposes state park entrance fees
Horsham water customers to receive PFAS reimbursement
West Chester proposal would increase taxes by 32%
Nick’s House perseveres in long court battle
Deed scam targets Montgomery County homeowners
Philadelphia’s COVID Emergency Rental Assistance Program now matching up to $1,500
The Suburban Realtors® Alliance hosted a Realtor® Town Hall with U.S. Rep. Mary Gay Scanlon (PA-5) — on Thursday, June 11, 2020. Watch it below:
The conversation covered COVID-19 relief efforts like Pandemic Unemployment Assistance and SBA loans, and broader legislative topics relevant to real estate like remote notarization.
Panelists for the town hall include:
• Congresswoman Mary Gay Scanlon (PA-5)
• Stefanie Hahn (NAR Federal Political Coordinator)
• Jamie Ridge (SRA President/CEO)
Update 3/20/2018: The U.S. Supreme Court and a federal district court both rejected lawsuits to overturn the revised Pa. congressional map.
Read about the rulings here: https://goo.gl/TM3vT6
The Pennsylvania Supreme Court on Feb. 19, 2018, released its map updating congressional districts in the commonwealth. Below is an interactive version of the new map, created by Kerrin Garripoli of Ceisler Media.
Lawmakers in Washington D.C. are under pressure to reach a spending deal — and have it signed by the president — by Friday, Jan. 19, at midnight. The date marks the expiration of a short-term spending agreement passed during a similar deadline in late December 2017.
If Congress can't reach a deal in time, the federal government will shut down, which would close many government offices, and prevent hundreds of thousands of federal employees from working. Essential government operations, such as those related to safety and national security, would continue to operate, as would the U.S. Postal Service.
According to a CNBC article posted last April, furloughs at the Internal Revenue Service and the Federal Housing Administration can create roadblocks for home buyers and sellers:
The National Flood Insurance Program (NFIP) is also at risk, after being extended last month along with the rest of government spending in a short-term continuing resolution. NAR has written letters to both the House and Senate urging long-term extension of the program, noting that when NFIP lapsed in 2010, "Each month cost more than 40,000 home sales."
After the government shutdown in 2013, from Oct. 1 to 16, the National Association of Realtors® (NAR) surveyed members about how they were affected. Seventy-one percent of respondents said their deals were not impacted at all, while those who experienced problems cited FHA/USDA closures as the biggest impediments. Note that NFIP was not affected in the 2013 shutdown.
Fans of the Netflix show Stranger Things might feel like they've entered the murky world of The Upside Down as they read over details of tax reform bills in Congress now.
Case in point: the Senate tax reform bill, dubbed the Tax Cuts and Jobs Act, would hurt middle-income homeowners but give tax breaks to private jet owners.
According to Yahoo News:
The new Senate tax bill will give those who own or lease private planes breaks on the amount they pay to companies for maintenance, storage, fueling and even when they want to hire pilots and a crew onboard.
The proposal is tucked in the middle of the controversial bill's latest version, dubbed the Tax Cuts and Jobs Act. The House approved the bill Thursday and it's now headed to the Senate.
The good news is pushing back on this ill-informed legislation isn't as perilous as battling the monsters from Stranger Things. It's as easy as contacting your elected officials in Washington and letting them know you think homeowners shouldn’t have to pay for corporate tax cuts with their home equity.
The National Association of Realtors® engaged KSE Focus to analyze the impact of the mortgage interest and real estate tax deductions in all 50 states and the District of Columbia.
The results show that Pennsylvania homeowners would be hit hard if these deductions are removed or rendered useless by tax reform legislation currently being considered.
Here are the results of KSE's analysis:
Facts on the Mortgage Interest and Real Estate Tax Deductions in Pennsylvania
Of the approximately 3,404,000 owner-occupied houses in Pennsylvania in 2014, 2,062,000 or 61% had a mortgage.
In 2014, 1,354,200 taxpayers in Pennsylvania claimed a deduction for mortgage interest (MID). The total amount deducted was $9,863,101,000. This means that the average taxpayer claiming the MID subtracted $7,300 from taxable income in 2014 as a result of the MID.
At a marginal rate of 25 percent1 , this means that the average taxpayer saved $1,820 in taxes as a result of the MID. The total tax savings from the MID in Pennsylvania in 2014 was $2,465,775,250.
In 2014, 1,592,700 taxpayers in Pennsylvania claimed a deduction for real estate taxes. The total amount deducted was $8,005,489,000. This means that the average taxpayer claiming the real estate tax deduction subtracted $5,050 from taxable income in 2014.
At a marginal rate of 25 percent2 , this means that the average taxpayer saved $1,260 in taxes as a result of the real estate tax deduction. The total savings from the real estate tax deduction in Pennsylvania in 2014 was $2,001,372,250.
If the MID and real estate tax deductions were eliminated, the loss would not be a one-year event; homeowners lose out on these potential savings each and every year. The present value3 of these lost savings could total $114,542,243,600. The value of all owner-occupied real estate in Pennsylvania in 2014 was $697,742,720,400. If the lost tax savings are fully capitalized into the price of houses, the average decline in value in Pennsylvania could be 16%. From the individual perspective, the median priced home in Pennsylvania in 2014 was $160,800. A decline in value as projected could mean a loss in home value of $26,400 for the typical home owner.
1 Marginal rates range from 10 to 35 percent.
3 Present value calculation assumes 3.9 percent discount rate and 1000 year time horizon.
Sources for the data above include: Internal Revenue Service 2014, American Community Survey 2014, National Association of Realtors® 2014; All calculations are by the National Association of Realtors® Research Division, July 2017.
Let your elected officials know how you feel about tax reform that harms homeowners by answering NAR's Call For Action.
Homeownership is the foundation of the American economy, HUD Secretary Ben Carson said at a forum on June 1.
Unfortunately, that sentiment is not reflected in tax reform proposals being pushed in Washington today.
On June 24, Congressional Republicans released a of comprehensive tax reform “blueprint” that would penalize most homeowners with a tax hike and remove incentives to homeownership that have existed for more than a century.
Realtors® are on high alert, focused on defeating any policy changes that would hurt homeowners.
“This proposal recommends a backdoor elimination of the mortgage interest deduction for all but the top 5 percent who would still itemize their deductions,” said National Association of Realtors® (NAR) President William E. Brown.
No bill has been introduced yet, but the consulting firm PricewaterhouseCoopers (PWC), commissioned by NAR, evaluated a tax reform plan modeled on the “blueprint.”
PWC’s study concluded that home-owning families with incomes between $50,000 and $200,000 would face average tax hikes of $815 in the year after enactment, while non-homeowners in the same income range would enjoy average annual tax cuts of $516. Further, home prices nationwide in the short run would fall by 10.2 percent.
The blueprint recommends cutting all but two deductions — for mortgage interest and charitable deductions — and doubling the standard deduction. These changes would make the mortgage interest deduction (MID) useless for nearly all middle-income homeowners.
Homeowners nationwide already pay 83 percent of all federal income taxes; they would pay an even bigger share under the proposed reform.
These changes would make the
mortgage interest deduction useless
for nearly all middle-income homeowners
NAR has released an interactive map tool showing how much homeowners currently benefit from the MID, sorted by congressional district. For example, in Pennsylvania’s 7th Congressional District — which includes portions of Delaware, Chester, Montgomery, Berks and Lancaster counties — 59 percent of homeowners claim the MID in 2015, cutting an average of $8,427 from their taxable income in 2015.
At that HUD forum in June, kicking off National Homeownership Month, Sec. Carson also said: "The importance of homeownership is apparent to all of us … security, certainty, safety, wealth creation, a path forward, self-sufficiency, a place to live with loved ones, to raise our families, the location of our neighborhood.”
Realtors® agree. And we support sensible tax reform, but we will fight hard against any policy that would harm homeowners.
Based on a recent statement by President Obama and activity in Congress, it appears that Washington may finally be inching toward reforming secondary mortgage giants Fannie Mae and Freddie Mac. While very few elected officials and market experts dispute the need for reform, opinions of how it should be accomplished vary greatly. For future home owners and the REALTORS® who will serve their home buying and selling needs, the details of the final reform plan will matter a great deal.
To date, lawmakers in Washington appear to be aligning themselves with two different reform camps. The first, led by the president and a bipartisan group of moderate legislators, favors reforms that would significantly restructure the secondary mortgage market, while maintaining a critical role for the federal government. The second, led by conservatives in the House and Senate, would end the government’s long-time role as a guarantor in the secondary market altogether, leaving serious doubt that market liquidity would be maintained by private market entities during tough economic times.
The National Association of REALTORS® (NAR) has stated its opposition to the latter reform plan in terms that are loud and clear. According to 2013 NAR President Gary Thomas, “NAR supports a comprehensive approach to restructuring the secondary mortgage market, including winding down Fannie Mae and Freddie Mac, but believes any new secondary market entity replacing the enterprises must have an explicit government guarantee.”
Without that guarantee, Thomas correctly argues, the nation’s $10 trillion mortgage market could lose a functioning secondary market, leading to its ultimate collapse. The impact of that collapse would result in a dramatic destruction of wealth for middle class Americans that would see the value of their homes fall significantly. The lack of a functioning secondary market would also lead to mortgage rates that are unnecessarily high and unaffordable for many Americans.
While NAR does argue that a federal guarantee is a necessary ingredient of any successful reform effort, it also warns against a restoration of the old, broken system. That system, unfortunately, resulted in the creation of two entities – Fannie Mae and Freddie Mac – whose shareholders pushed private profits without demonstrating any concern for taxpayer losses.
Rather than an attempt to “fix” Fannie and Freddie, NAR is recommending that the president and Congress work toward the creation of new entities that are government-chartered, non-shareholder owned, and subject to strong oversight that “ensures they can accomplish their mission and protect the taxpayer.”
Along with the top priorities of protecting taxpayers and ensuring mortgage liquidity at all times, NAR is advocating for the following:
The American economy and individual home owners have benefitted greatly over the past 70 years from the stable source of mortgage funding provided through the government sponsored enterprises, Fannie Mae and Freddie Mac. Let’s hope that their shocking failures, ultimately brought on by a harsh recession and too much focus on shareholder profit over taxpayer protection, has created enough urgency in Washington to introduce meaningful reforms that will help us avoid another such calamity.
The result of such a reform effort, if it can be accomplished by a Congress and president that haven’t proven their ability to accomplish much lately, would be a new and improved secondary mortgage market that could help sustain home ownership and the national economy into the distant future.
Jamie Ridge is president/CEO of the Suburban REALTORS Alliance