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Economist Assesses Impact of Ryan-Jefferson Mortgage Insurance Bill

Mortgage Insurance Tax Deductibility Will Create Up to 250,000 New Jobs; Boost Annual Home Purchases By Up To 300,000

 WASHINGTON, DC – U.S. Reps. Paul Ryan (R.-Wis.) and William Jefferson (D.-La.) today shared with other Members of Congress the results of a new economic study about H.R. 1336 - legislation they introduced earlier this year that would make mortgage insurance tax deductible.  In this white paper, economist John Tuccillo, Ph D., asserts specifically that home buying will surge by an estimated 300,000 purchases each year, creating between 150,000 and 250,000 new U.S. jobs, specifically in the home building sector. 

“This new information gives added momentum in Congress to our legislation,” Ryan said. “The analysis shows how our mortgage insurance bill will both boost homeownership and create new jobs in America.  Many of our colleagues have endorsed this key legislation, and I hope that even more will sign on to help open doors to first-time and low-income homeowners and spark job growth throughout this country.  The current mortgage interest tax deduction is largely a middle and upper income tax benefit.  We want to extend this tax benefit to lower income first-time home buyers.”   

The Financial Services Roundtable today released the white paper, which is also endorsed by the United Brotherhood of Carpenters and Joiners of America.  In the House of Representatives, congressional support for H.R. 1336 is mounting, with more than one hundred cosponsors.  

“I am very pleased that so many of our colleagues have joined in support of this legislation,” said Congressman Jefferson.  “With the release of this insightful and credible report, I believe that others in the House will be encouraged to join in this effort to help more American families achieve the American dream of homeownership.  Additionally, throughout these troubled economic times, it has been the housing market that has kept our economy going but, some believe there are signs that the housing market is slowing down.  This report supports our belief that this legislation will help ensure that the momentum in home buying is sustained.” 

Government and private mortgage insurance programs help first-time, low-income and veteran borrowers afford to purchase a home. The VA, FHA, RHA and PMI programs allow buyers to make a down payment of 3 percent or less of the appraised value.  Mortgage insurance is a critical factor in allowing middle-income families and minorities to become homeowners.

In 2001, nationwide, mortgage insurance covered 57 percent of mortgage purchase loans made to African American and Hispanic borrowers and 54 percent of the loans to borrowers with incomes below the median income.  Twelve million American families presently use mortgage insurance.

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