Felix Salmon

Chart of the day: Where does the mortgage-interest deduction go?

Check out page 44 of the Joint Committee on Taxation report on the way that household debt is treated for tax purposes. I’ve put the table into chart form, to make it easier to see what’s going on. Apologies for the rather weird y-axis on the chart: it’s serving a double purpose, counting total returns for the left-hand column and dollars for the right hand column. I would have done a dual axis, but I was having difficulty making that work in Excel.

More data on mortgage delinquency and downpayments

Last month, in a post headlined “how the mortgage industry lies with statistics,” I bemoaned the fact that I couldn’t find good real data to compare to the massaged data which went into this chart.

What will the AGs get in return for giving banks immunity?

Shahien Nasiripour has an update on the talks between the big banks and the state attorneys general, with some rather worrying news: under the proposed settlement, the AGs are going to give the banks broad immunity from prosecution, despite the fact that they don’t really have a clue what the banks might have done wrong.

When banks voluntarily do principal reductions

The holy grail of mortgage modification is principal reduction — the only thing which gets homeowners out of negative equity hell. And one of the big questions is why it’s not more common: it seems to make sense for all concerned, given that a sensibly modified mortgage is likely to be much more profitable for a bank than forcing a homeowner into a short sale or foreclosure and trying to sell off the home in the current market.

How the mortgage industry lies with statistics

Yesterday something calling itself the Coalition for Sensible Housing policy put out a dense 13-page white paper entitled “Proposed Qualified Residential Mortgage Definition Harms Creditworthy Borrowers While Frustrating Housing Recovery”.

When Uncle Sam forecloses

You probably won’t be surprised to hear that Wells Fargo is sparring with the government on the subject of foreclosures. But you might be surprised to see who’s on which side:

Casey Mulligan’s weird defense of the mortgage-interest deduction

It’s not easy to find an economist who thinks the mortgage interest tax deduction is a good idea, but the NYT has managed it, with this column from Casey Mulligan. Unfortunately, it makes no sense. Here, for instance, is the first paragraph, in full:

The anti-risk-retention lobby’s bizarre logic

John Carney doesn’t go far enough in his attack on what he calls the Home Ownership Mob. Whenever you see the Mortgage Bankers Association getting into bed with the Center for Responsible Lending, you know something funny is amiss, and in this case it’s their joint opposition to the bit of Dodd-Frank which says that if banks securitize mortgages, they have to keep a modest 5% slice on their own balance sheet.

The stocks-housing disconnect

The double dip in the housing market — with house prices nationally now back to their 2002 levels — stands in stark contrast to what’s going on in the stock market, and a lot of people, myself, included, are puzzling over why that might be.