Housing interests represented at the Mortgage Bankers Association's annual convention have continued to line up against the possibility that the president's tax reform panel will propose whittling away at the tax deduction for mortgage interest and other cherished writeoffs that support homeownership.Freddie Mac president Eugene McQuade told the Orlando, Fla., convention that any big change in the tax benefits would "profoundly affect" the value of the properties that stand behind trillions of dollars worth of mortgages. "Before we say we are going to change" the deductibility of mortgage interest, "we better understand the broad implications that it will have [for] society," he told the meeting. Calling the writeoff "fundamental to housing values" and "arguably the most successful social program of the last 50-75 years," the Freddie Mac officer said the deduction "is part of the statement made over the years as to where we place our priorities, and with a relatively low cost to the government." Mr. McQuade is also worried that rising interest rates will exacerbate the nation's affordable housing woes. Housing prices are already "at shock levels for most people," he explained, and higher rates will only serve to drive monthly payments even higher. Rates have been so low for so long, he said, that an entire generation of potential buyers have never seen mortgage rates above 6%.

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