by Leroy Johnson

Created on: February 19, 2010

Let's not single out the mortgage broker in the arena of lending. Let's put the blame squarely where it lies: With the lender, the IRS, and with the government.

As head of the Green-lining Coalition, Robert Gnaizda has lobbied against Countrywide Loans, Citi Bank and many other lenders for what he termed,  their "predatory lending practices. Bank of America and Wells Fargo also were targets, as well as Former Federal Reserve Board chair Ben Bernanke.

Yet, if regulatory agencies such as The State of California, Department of Corporations, monitored these lenders more closely, they would not so brazenly violate the terms of Senate Bill 1137, authored by former State Senator Don Perata. The state does not enforce Senate Bill 1137.  The Federal Government has its Housing and Urban Development oversight, which does about as much overseeing as your local police department.

Then we come to The Internal Revenue Service. It is quick to place a lien on your home if your taxes become delinquent, or to seize assets if one cannot afford to pay. What the IRS will not so easily perform is the granting of the kind of refund that, if duly processed, would render most people who refinanced or bought a home within the past three years, enough of a refund to keep their property. What's more, these claims, if properly documented, are valid.  If one buys, builds or sells a home which is their primary residence, they may write off  fully deductible mortgage interest in that loan up to one million dollars, a half million if single and filing individually.

Home Acquisition Debt is a major deduction, and it's legitimate IRS Publication 936 and the Debt Forgiveness & Recovery Act of 2007, allow a homeowner to deduct mortgage interest on their refinanced loan, up to the amount of the loan before it is refinanced. The problem: It is very difficult to get the IRS representatives to honor the Rule of Law. 

So again, don't blame the mortgage crisis on the lender. If the IRS, HUD, The States and Congress were more assertive, we would have no bailout deficit, nor would so many people be forced out of their homes. And the victims of Predatory Lending who filed for Hone Acquisition Debt refunds, would be financially able to whether the storm.

Learn more about this author, Leroy Johnson.
Click here to send this author comments or questions.