Fairfax Housing Market Trending Up, Homes Selling Quickly

Grubb & Ellis files bankruptcy, to be sold to BGC

(Reuters) – Grubb & Ellis Co filed for bankruptcy protection amid a slower-than-expected recovery in the commercial property market, and agreed to sell nearly all its assets to the financial services brokerage BGC Partners Inc .
Howard Lutnick, chief executive of BGC and also of the boutique investment bank Cantor Fitzgerald LP, said in a statement the purchase reflects BGC’s desire to “build a premier position” in real estate services.
BGC in October bought Newmark Knight Frank, a New York real estate services company that employs more than 7,000 people.
Founded in 1958, Grubb & Ellis said it manages in excess of 250 million square feet (23.2 million square meters) of property, and employs more than 3,000 people.
Its services include tenant representation, property leasing and sales, commercial property and corporate facilities management, appraisals and commercial mortgage brokerage.
Chief Financial Officer Michael Rispoli said in a court filing Grubb & Ellis was hurt by its merger with real estate investment management company NNN Realty Advisors Inc in December 2007, which in retrospect “couldn’t have come at a worse time.”
He said losses piled up during the financial crisis, and that the Santa Ana, California-based company was further hurt by the sluggish real-estate market. Rispoli said Grubb & Ellis does not have enough cash to make it through the end of March.
An expedited sale through the bankruptcy process “is the only remaining way to allow Grubb & Ellis to preserve its business as a going concern, protect jobs, and maximize the value of the debtors’ estates,” Rispoli wrote.
Grubb & Ellis had $150 million of assets and $167 million of liabilities as of December 31, according to its petition filed Monday in U.S. Bankruptcy Court in Manhattan. Sixteen affiliates also sought protection from creditors.
The company said BGC will provide financing to keep it operating without disruption. BGC separated from Cantor Fitzgerald in 2004.
The case is In re: Grubb & Ellis Co et al, U.S. Bankruptcy Court, Southern District of New York, No. 12-10685.
(Reporting by Jonathan Stempel in New York; Additional reporting by Sakthi Prasad in Bangalore; Editing by Kim Coghill, Dave Zimmerman)

Sen. Scott Brown backing bill to boost housing market by speeding up short sales

Published: Tuesday, February 21, 2012, 12:20 PM     Updated: Tuesday, February 21, 2012, 12:55 PM

 By Robert Rizzuto, The Republican 

(Associated Press)This Dec. 13, 2011 photo, shows a for sale sign in front of a Newton, Mass. A bill being backed by Sen. Scott Brown would make short sales more enticing to buyers, potentially pulling up the housing market over time.

WASHINGTON D.C. – In an effort to boost the housing market and benefit both sellers and buyers, the junior senator from Massachusetts joined colleagues from both political parties in introducing the Prompt Notification of Short Sales Act.

Sen. Scott Brown, R-Mass., along Sen. Lisa Murkowski, R-Alaska, and Sen. Sherrod Brown, D-Ohio, introduced the legislation to shorten the process of a short sale, which takes place when a homeowner sells a house for less than is owed to the bank, with the bank agreeing to take a loss.

Short sales can result in a long, drawn-out process that leaves both a buyer and seller on the edge for weeks, or even months, as they await a decision from the lien holder of the property. The bill would require financial institutions to respond in writing within 75 days stating whether they accept or reject the offer, allowing the bank to include a counter offer or a request for an extension. If they fail to reply in the allotted time, a prospective home buyer would be entitled to $1,000 and recovery of any legal fees associated with the attempted purchase.

The bill borrows from a 2011 House of Representatives bill which failed to pass. That bill, however, included language which stated that without a written response from a mortgage holder after 45 days, a short sale would be considered approved.

“There are neighborhoods across the country full of empty homes and underwater owners that have legitimate offers, but unresponsive banks,” Murkowski said in a statement. “What we have here is a failure to communicate. Why don’t we make it easier for Americans trying to participate in the housing market, regardless of whether the answer is yes, no or maybe.”

Scott Brown said he hopes the bill would boost the market by making short sales more enticing to buyers, thus decreasing the amount of foreclosures.

In this May 19, 2010, file photo, Sen. Scott Brown, R-Mass., stands on the balcony outside of his office on Capitol Hill in Washington. (AP Photo/Harry Hamburg, File)

“It’s time to close the communication gap between banks and prospective homeowners who are willing and able to purchase short sale properties,” he said. “Our economy needs these home sales, and this legislation would lift the real estate market and benefit neighborhoods across the country.”

The bill is being backed by the National Association of Realtors, whose members know first-hand the reluctance of buyers to deal with short sales.

John McGeough and Anthony Lamacchia, co-owners of McGeough Lamacchia Realty, Inc. in Massachusetts, said the bill would not only simplify the process, but it has the potential to pull the housing market up.

“If this bill goes into law in time it would contribute to an increase in home prices because it would get more buyers to buy short sales and more sellers to pursue short sales,” McGeough said.

The realtors said that short sale homes tend to be in better shape than foreclosures and they have sold for about 25 percent more than foreclosed homes over the past couple years in Massachusetts. The higher price, the realtors noted, means that short sale properties don’t drag down the surrounding properties like vacant foreclosures can do, while still remaining affordable for first-time home buyers.

The bill was read twice in the Senate and referred to the Committee on Banking, Housing, and Urban Affairs.

Foreclosure Deal to Spur Home Seizures, Help Heal the Market

February 09, 2012, 5:53 PM EST

Bloomberg

(Updates with home-price decline in sixth paragraph, loan- modification figures in eighth, foreclosure data in 11th.)

Feb. 9 (Bloomberg) — The $25 billion settlement with banks over foreclosure abuses may trigger a wave of home seizures, inflicting short-term pain on delinquent U.S. borrowers while making a long-term housing recovery more likely.

Lenders slowed the pace of foreclosures as they negotiated with attorneys general in all 50 states for more than a year over allegations of faulty and fraudulent paperwork used to repossess homes. With today’s agreement, banks are likely to resume property seizures.

“The best thing about the settlement, frankly, is that it will be done,” said Stan Humphries, chief economist for Seattle-based Zillow Inc., a provider of home-sales data. “The shadow of the settlement hung over the market for a year now.”

The backlog of foreclosures has trapped homeowners in properties they can no longer afford, depressed prices by increasing the number of abandoned properties and led banks to tighten mortgage credit standards because of uncertainty about their potential obligations. Foreclosure starts fell 46 percent in December from October 2010, when the investigation into the so-called robo-signing of mortgage documentation began, according to Irvine, California-based RealtyTrac Inc.

The agreement will direct $17 billion to writing down debt to buffer about 1 million homeowners from foreclosure. About 11 million U.S. homeowners have negative equity, or owe more on their mortgages than their homes are worth, according to CoreLogic Inc., a real estate data provider. That has limited their ability to sell or refinance and reduced the incentive to keep paying.

Strategic Default

Principal reductions may help cut the number of mortgage defaults by improving homeowners’ finances and reducing incentives for so-called strategic default, when homeowners walk away from a property because they have too much negative equity, according to a Federal Reserve report sent to Congress on Jan. 4. Home prices have dropped 33 percent from their July 2006 peak, according to the S&P/Case-Shiller index of values in 20 U.S. cities.

U.S. homeowners have $750 billion in negative equity, Humphries said. The settlement will help the housing market “at the margins, but little more,” according to an analysis late last month by London-based Capital Economics of the impact of the settlement on housing.

Principal was reduced on 10,772 loans, or 7.8 percent of the mortgages with payment modifications, in the third quarter of last year, according to the office of the U.S. Comptroller of the Currency. All of those loans were held by private investors or bank portfolios.

Reductions ‘Seem Small’

“There has been a lot of discussion of principal reductions and whether that’s the one measure the U.S. housing market needs to get it going again,” Paul Diggle, a property economist at Capital Economics, said in a telephone interview this week. “That may well be the case. But the amounts of principal reductions under the settlement seem small.”

The agreement announced today includes $5 billion in cash for states to pay for foreclosure-prevention initiatives. Loan servicers will refinance $3 billion in mortgages to lower homeowners’ interest rates and pay about $1.5 billion to homeowners harmed by botched foreclosures.

About 5 million homes have been lost to foreclosure in the U.S. since 2006, according to RealtyTrac.

Excluding 92 Percent

The agreement may help about 1 million homeowners with mortgage forgiveness, forbearance or loan modifications, according to Housing and Urban Development Secretary Shaun Donovan. About 750,000 more may benefit from direct payments of as much as $2,000 to compensate them for servicing errors.

For California, which has the highest number of properties in the foreclosure pipeline, banks agreed to pay $12 billion to help 250,000 homeowners with principal reductions or short sales, when a lender agrees to a sale for less than owed on the home, according to Kamala Harris, the state’s attorney general.

Florida Loan Modifications

Borrowers in Florida, the state with the second-most foreclosures, will receive an estimated $7.6 billion in benefits from loan modifications, including principal reduction, according to state Attorney General Pam Bondi.

The money set aside for mortgage-debt forgiveness also can be used for short sales. Banks have been stepping up the sales by pre-approving deals, streamlining the closing process, forgoing their right to pursue unpaid debt and in some cases providing as much as $35,000 in “relocation” incentives. The deals accounted for 33 percent of financially distressed transactions in November, up from 24 percent a year earlier, according to Santa Ana, California-based CoreLogic.

The total value of the agreement with lenders including Citigroup Inc., Bank of America Corp. and Wells Fargo & Co. may grow to $40 billion if the next nine largest mortgage servicers sign on to the agreement, Donovan said. In a best-case scenario, if all banks participate fully, the deal might be worth $45 billion to homeowners and victims of foreclosure.

Testing Effectiveness

The money may have an added benefit: It will test the effectiveness of principal forgiveness in preventing defaults, and may spur a larger-scale program if successful, Diggle said.

After a six-year slide in home prices, demand is showing signs of strengthening, bolstered by a jobless rate that fell to 8.3 percent last month. The number of Americans who signed contracts to buy previously owned homes in December held near a 19-month high, indicating that stabilization in the market that began in late 2011 may continue this year.

The surge of home seizures may drive down home values, at least for a while, in a fragile market. The number of new foreclosure filings fell 34 percent last year, according to RealtyTrac, building up a backlog of homes that now may flood the market with low-cost properties.

“All of this will result in more foreclosure pain in the short term as some of the foreclosures that should have happened last year instead happen this year,” Daren Blomquist, a RealtyTrac vice president, said in an e-mail today.

About 1 million foreclosures with be completed this year, up 25 percent from 2011, according to the firm.

‘More Price Weakness’

“I think there’ll be more price weakness, because we’ll see the number of distressed sales pick up,” said Mark Zandi, chief economist for Moody’s Analytics Inc. in West Chester, Pennsylvania. “But I think the price declines will be modest. I think the banks themselves are going to be very sensitive to market prices. I don’t think they’re just going to dump property. That wouldn’t be in their best interest.”

Lenders are unlikely to flood the market because it will damage prices for all properties, according to Sam Khater, senior economist for CoreLogic. Banks may be limited by their own capacities to process foreclosures. The settlement prohibits the practice of robo-signing, which employed assembly lines of workers to sign thousands of foreclosure documents at a time without verifying them.

“You can’t dump all these properties at the same time,” Khater said. “That would be disastrous. You have to release them in a slow and measured fashion, so the market can absorb them.”

Obama Administration’s Programs

The settlement adds to a series of recently expanded government steps to protect consumers and encourage lenders to refinance homes and modify payment terms for homeowners facing foreclosure.

President Barack Obama this month proposed plans to expand loan modifications for delinquent homeowners to include some principal reductions through his administration’s Home Affordable Modification Program, or HAMP. Underwater homeowners would be able to refinance at current low interest rates through the Home Affordable Refinance Program, or HARP. Some of the refinancing plans require Congressional approval.

Programs under the administration’s Making Home Affordable program had $29.9 billion in aid pledged as of Jan. 30.

Bulk Home Purchases

Separately, Fannie Mae, the mortgage company under U.S. conservatorship, invited investors to apply for a new program to buy foreclosed homes in bulk to be managed as rental properties, under another program announced by the Federal Housing Finance Agency. The goal of that program is to reduce the inventory of foreclosures while providing rental homes to people who can’t qualify to buy or don’t want to own.

“No action, no matter how meaningful, is going to by itself entirely heal the housing market,” Obama said at an appearance with state attorneys general in Washington today. “But this settlement is a start. And we’re going to make sure that the banks live up to their end of the bargain.”

There remains a danger that “a wave of foreclosures” may destabilize the housing market, said Susan Wachter, professor of real estate and finance at the University of Pennsylvania’s Wharton School.

“The logjam has to be unleashed and it has been — this will do that,” she said. “That’s a good thing. But then there needs to be methodical loan-by-loan determination of the best resolution.”

Demand for Rentals

Investors are likely to buy many of the foreclosed homes that come on the market to take advantage of low prices and demand for rentals, Zandi said. About 21 percent of home sales in December were investor purchases, according to the National Association of Realtors.

Private equity funds including Los Angeles-based Oaktree Capital Management LP and New York-based GTIS Partners announced plans in January to buy $2.5 billion of foreclosed single-family homes to manage as rentals, focusing on states with the highest number of foreclosures, such as California, Florida and Nevada.

“There’s pretty strong investor demand, particularly in some markets where prices have overshot,” Zandi said. “They’ve gone well below what you’d expect given incomes and rents.”

–With assistance from Dan Levy in San Francisco and Lorraine Woellert in Washington. Editors: Daniel Taub, Larry Edelman

To contact the reporters on this story: Prashant Gopal in New York at pgopal2@bloomberg.net; John Gittelsohn in Los Angeles at johngitt@bloomberg.net

To contact the editor responsible for this story: Daniel Taub at dtaub@bloomberg.net

New-home purchases fall, 2011 worst ever for sales

By DEREK KRAVITZ | Associated Press – 5 hrs ago

This Jan. 18, 2012 photo shows a new home in a development in Pleasant Hills, Pa. …
WASHINGTON (AP) — Fewer Americans bought new homes in December. The decline made 2011 the worst year for new-home sales on records dating back nearly half a century.
The Commerce Department said Thursday new-home sales fell 2.2 percent last month to a seasonally adjusted annual pace of 307,000. The pace is less than half the 700,000 that economists say must be sold in a healthy economy.
About 302,000 new homes were sold last year. That’s less than the 323,000 sold in 2010, making last year’s sales the worst on records dating back to 1963. And it coincides with a report last week that said 2011 was the weakest year for single-family home construction on record.
The median sales prices for new homes dropped in December to $210,300. Builders continued to slash price to stay competitive in the depressed market.
Still, sales of new homes rose in the final quarter of 2011, supporting other signs of a slow turnaround that began at the end of the year.
Sales of previously occupied homes rose in December for a third straight month. Mortgage rates have never been lower. Homebuilders are slightly more hopeful because more people are saying they might consider buying this year. And home construction picked up in the final quarter of last year.
“Although this decline was unexpected, it does not change the story that housing has likely bottomed,” said Jennifer H. Lee, senior economist at BMO Capital Markets.
Ian Shepherdson, chief economist at High Frequency Economics, said easier lending requirements, historically low mortgage rates and improved hiring all point to consistent, albeit slow, rises in sales in the coming months.
“A sustained rise in new home sales is imminent,” he said. “Homebuilders say so too, and they should know.”
Hiring is critical to a housing rebound. The unemployment rate fell in December to its lowest level in nearly three years after the sixth straight month of solid job growth.
Economists caution that housing is a long way from fully recovering. Builders have stopped working on many projects because it’s been hard for them to get financing or to compete with cheaper resale homes. For many Americans, buying a home remains too big a risk more than four years after the housing bubble burst.
Though new-home sales represent less than 10 percent of the housing market, they have an outsize impact on the economy. Each home built creates an average of three jobs for a year and generates about $90,000 in tax revenue, according to the National Association of Home Builders.
A key reason for the dismal 2011 sales is that builders must compete with foreclosures and short sales — when lenders accept less for a house than what is owed on the mortgage
Builders ended 2011 with a third straight year of dismal home construction and the worst on record for single-family home building. But in a hopeful sign, single-family home construction, which makes up 70 percent of the market, increased in each of the last three months.

Foreclosure Properties Decline to 20% of Home Purchases in U.S.

By Dan Levy

Jan. 26 (Bloomberg) — Foreclosure and distressed sales fell to 20 percent of U.S. home purchases in the third quarter of last year as legal scrutiny of property seizures reduced the number of deals, according to RealtyTrac Inc.

Transactions involving bank-owned property and short sales, where lenders accept less than the amount owed, were down from 22 percent of total home purchases in the second quarter and 30 percent a year earlier, the Irvine, California-based data seller said today in a statement.

“The sooner the market gets more clarity about accepted foreclosure procedures, primarily through the long-promised settlement between multiple states attorneys general and major lenders, the sooner the market can more efficiently dispose of these distressed properties,” RealtyTrac Chief Executive Officer Brandon Moore said in the statement.

Foreclosure sales and first-time default notices have declined since banks and servicers were accused more than a year ago of using flawed documentation to repossess homes. A proposed settlement with lenders including Bank of America Corp., JPMorgan Chase & Co., Citigroup Inc., Wells Fargo & Co. and Ally Financial Inc. is getting closer to resolving the complaints, Iowa Attorney General Tom Miller said Jan. 24.

Properties in the foreclosure process or already seized by lenders sold for an average $165,322 in the third quarter, up 1 percent from the second quarter and down 3 percent from a year earlier, RealtyTrac said. The price represents an average discount of 34 percent compared with a non-foreclosure property, unchanged from the second quarter and down from a 37 percent difference a year earlier, the company said.

Repossessions to Increase

As lenders resume foreclosures, home repossessions are likely to rise about 25 percent this year from the more than 804,000 properties seized in 2011, Daren Blomquist, a RealtyTrac spokesman, said in an interview earlier this month. Banks had already begun to accelerate default and repossession proceedings in the second half of 2011, according to Moore.

A total of 221,536 homes that sold in the third quarter were in some stage of foreclosure, meaning they had received notices of default, auction or repossession, RealtyTrac said. That was down 11 percent from a revised second quarter total and 5 percent from a year earlier. Bank-owned homes made up 128,712 of those sales, and pre-foreclosure transactions, including short sales, accounted for 92,824.

Pre-foreclosure deals increased 68 percent from a year earlier in Michigan, 44 percent in North Carolina, 43 percent in Ohio and 35 percent in Georgia. Such transactions outnumbered bank-owned sales in Colorado, Florida, New Jersey and New York, according to RealtyTrac.

Biggest in Nevada

Nevada had the biggest share of foreclosure-related sales of any state, at almost 57 percent of total home purchases in the third quarter. The 13,992 bank-owned and pre-foreclosure sales represented a 24 percent increase from a year earlier, RealtyTrac said.

The share of foreclosure sales in California was 44 percent, with the state’s 62,583 transactions up 7 percent from the third quarter of 2010. The proportion in Arizona was 43 percent, with 21,619 such purchases up 19 percent.

In Florida, where courts oversee property seizures by lenders, foreclosure sales plunged to 19 percent of all deals from 39 percent in the third quarter of 2010.

Foreclosure-related transactions as a share of total sales were 34 percent in Georgia, 26 percent in Colorado and 23 percent in Michigan.

RealtyTrac sells default data from more than 2,200 counties representing 90 percent of the U.S. population. Compilation of property-title transfers delays reporting of foreclosure sales data by a quarter.

–Editors: Daniel Taub, Josh Friedman

To contact the reporter on this story: Dan Levy in San Francisco at dlevy13@bloomberg.net

To contact the editor responsible for this story: Daniel Taub at dtaub@bloomberg.net

U.S. is top 2012 property investment pick

By Ilaina Jonas | Reuters – 14 hrs ago

NEW YORK (Reuters) – The United States will remain the top choice of most global commercial real estate investors in 2012, but the country has lost ground to Brazil which ranked No. 2 this year, according to a survey released Sunday.

While the United States offers the most stable and secure option in commercial real estate, investors said improvement in rent and occupancy growth and the repeal of a 1980 foreign investment tax would have the strongest impact on their investment decisions, according to the 20th annual survey of Association of Foreign Investors in Real Estate (AFIRE) members.

For about the past year or so, investors in U.S. commercial real estate have focused on gateway cities such as New York, Washington, Boston, San Francisco and Los Angeles, driving prices up and yields down.

Meanwhile commercial property in Brazil, with its bubbling economy and safer investmentenvironment, has become a hot spot for global investors. Sao Paulo, Brazil’s largest city, jumped to the fourth best city for real estate investment dollars in 2012, up from 26th place last year.

The United States is still very desirable and was second behind the UK in attracting cross border investment in 2011, according to Real Capital Analytics preliminary figures.

“The negative is it doesn’t promise a whole lot of capital appreciation because the prime markets are already fully priced,” AFIRE Chief Executive Officer James Fetgatter said. “By no means will Brazil replace the U.S., at least not in the forseeable future. Brazil is considered now a much safer place to invest and a place where you can get capital appreciation and good yield.”

AFIRE’S survey respondents hold more than $874 billion of real estate globally, including $338 billion in the United States.

Sixty 60 percent of respondents said they plan to increase their investment in U.S. real estate in 2012, down from a record 72 percent last year, according to the 20th annual survey.

Some 42.2 percent said they believed the United States in 2012 would offer the best opportunity for the price of their commercial real estate investments to increase, down from 64.7 percent last year’s survey.

The United States lost ground to Brazil, with 18.6 percent saying Brazil’s property market offered the best growth opportunity for their investment dollars. That’s up 14.2 percentage points, moving Brazil up to second place from fourth, and pushing China down to No. 3, according to the AFIRE survey.

Seventy percent of respondents picked one of the three countries as their favorite, while the remaining 30 percent had top choices from 13 other countries on five continents.

Respondents said they would invest more in U.S. commercial property if the fundamentals of rent and occupancy growth were stronger.

Another U.S. barrier respondents cited was the Foreign Investment in Real Property Tax Act (FIRPTA). The 1980 act, originally designed to protect farm property from foreign ownership, subjects foreign buyers to both their domestic and U.S. taxes when they sell their investment, unless their home country has a taxation treaty with the United States.

FIRPTA opponents have argued that the act unfairly penalizes foreign investors of real estate. Such double taxation does not apply if they buy U.S. stocks or bonds.

As for the top cities for foreign investment in 2012, New York remained No. 1. London moved up to No. 2 from No. 3, swapping ranks with Washington. Sao Paulo was fourth, and San Francisco moved up to No. 5 from No. 10 last year.

Europe’s sovereign debt problems and looming recession pushed most of the countries there – except for a few such as Switzerland and Poland – off the map for real estate investors. Germany lost about half its support among respondents in terms of stability and price appreciation, according to the survey.

Emerging markets also seem to be getting more popular among potential investors. Respondents identified 25 countries they would consider for investment, up from 18 last year. Brazil topped the list, with China in second place, as each did last year. Turkey moved up to No. 3 from No. 7 last year. India and Vietnam each dropped down one spot, to No. 3 and No. 4 respectively. Appearing for the first time were Colombia, at No. 10, Hungary at No. 12, and Qatar at No. 17.

As for U.S. commercial real estate, respondents said that this year they would most likely invest in apartment buildings, the fourth consecutive year multifamily topped the list. Of all the types of U.S. commercial real estate, the multifamily sector has not only recovered from the post-2007 real estate slump but rents and occupancy are even stronger than before.

Warehouse and distribution centers ranked second, up from No. 5 last year. Office properties were third, up a notch from No. 4. Retail properties – shopping centers and malls – slipped to No. 4 from No. 2. Hotels ranked No. 5, down from No. 3 last year.

The survey was conducted in the fourth quarter by the James A. Graaskamp Center for Real Estate, Wisconsin School of Business.

(Reporting By Ilaina Jonas; Editing by Richard Chang)

Home Owners Have a Good Reason to Hide: Uncle Sam Wants More

• Published: April 15, 2011
• By: Matt Dornic

The answer is simple—he’s an American home owner, hiding for good reason:

Did you know U.S. home owners already pay 80% to 90% of all federal income tax collected? And now the government wants more. Rather than curbing wasteful spending, some policymakers want Americans to part with deductions like property taxes and mortgage interest—a perk of home ownership for more than 80 years.

During an April 13, 2011, speech on deficit reduction, President Obama said, “The tax code is also loaded up with spending on things like itemized deductions. And while I agree with the goals of many of these deductions, like home ownership or charitable giving, we cannot ignore the fact that they provide millionaires an average tax break of $75,000 while doing nothing for the typical middle-class family that doesn’t itemize.”

What the president’s carefully-worded statement ignores is the huge number of typical middle-class families who do itemize their tax returns. The reason most taxpayers itemize is because they are home owners—91% of families currently claiming the mortgage interest deduction (MID) earn less than $200,000 annually and 65% earn less than $100,000 per year. Not only would a repeal of the MID hit middle-class families square in their wallets, experts say it would be a devastating blow to the housing market—dropping home values by up to 15%. The notion that deductions for home ownership do nothing for the middle class is wildly inaccurate.

With Tax Day right around the corner, now’s the perfect time to determine just what the MID means to your family. Take a look at your federal tax form Schedule A (if you are filing tax form 1040) and see line 10.  That line shows the deduction for your home mortgage interest—$12,200 on average, translating to a total savings of $3,050 for the typical U.S. home owner.

No small chunk of change. Loss of the MID would have serious implications for American families. Saving the average household over $3,000 per year, the MID means:

• A year’s worth of groceries for two people: $2,694 on average.*

• Household utilities for a year (heating, cooling, fuels and public services): $3,477 on average.*

• 12 months of car payments for the average family: $3,269.*

• The average family’s annual entertainment expenses: $2,698.*

• Your family’s health care for a year: average expense of $2,853.*

*Figures based on a 2009 U.S. Department of Labor 2009 Labor Statistics Report

If you’re like me, you’re frustrated by the government’s runaway spending and discouraged by the deficit. But taking away the few perks enjoyed by the people already paying most of this country’s taxes is an unfair and unacceptable way of confronting the national debt.

Read more: http://www.houselogic.com/blog/mortgage-interest-deduction/home-owners-have-good-reason-hide-uncle-sam-wants-more/?nicmp=outbrain&nichn=cpc&niseg=hlblog##ixzz1fcx7Bjwx

Or at least, that’s what one real-estate website told him. Another valued the house at only $640,500. And these online estimates left him all the more confused when a real-life appraiser, assessing the house for the refinancing loan, pinned its value at $1.5 million. “I have no idea how those numbers could be so different,” Mr. Gonsalves says.

Right or wrong, they’re the numbers millions of consumers are clamoring for. After years of real-estate pros holding all the informational cards in the home-sale game, Web-driven companies like Zillow, Homes.com and Realtor.com are reshuffling the deck, giving home shoppers and owners estimates of what almost any home is worth. People have flocked to the data in startling numbers: Together, four of the biggest sites that offer home-value estimates get 100 million visits a month, with web surfers using them to determine what to ask or bid for a home, or whether to refinance.

But for figures that can carry such weight, critics say, the estimates can be far rougher than most people realize. Valuations that are 20% or even 50% higher or lower than a property’s eventual sale price are not uncommon, as the sites themselves acknowledge. The estimates frequently change, too—sometimes by hundreds of thousands of dollars—as sites plug new data into their algorithms.