Uncertainty looms for mortgage interest tax deduction

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It is difficult to ascertain if executives from the National Association of Realtors are more concerned about the prospect of rising interest rates or the winds of tax reform. Both David Lereah, the huge trade group's chief economist, and Walter McDonald, its immediate past president, said that the association "would aggressively oppose" any move to eliminate the mortgage interest deduction in the Bush administration's second term. "We have heard that tax reform will probably be on the table," Lereah said. "We will do everything we can to see that it remains in place for consumers." Lereah, a former economist for the Mortgage Bankers Association of America, is now in his fifth year as the head interest rate prognosticator for the country's largest trade organization. He is predicting mortgage interest rates will rise to an average of 6.5 percent in 2005. Like any good leader, he found a way to look at the bright side of higher priced loans. "That will help to limit the effect of risin...