Homeowners can give thanks for a do-nothing Congress

The federal government is stuck, which might be good news for people who own a house and depend on their tax breaks to get by.

Q. Several months ago, you wrote Congress was considering a bill that would reduce the mortgage-interest deductions that homeowners can take. What is its status?

A. It’s “on hold” for now, with virtually no chance of passage this year and (thankfully) a grim outlook for 2014.

Housing groups and Capitol Hill observers have been keeping a particularly keen eye on a proposal that’s trying to be sheparded through Congress by U.S. Rep. Dave Camp, a Republican from Michigan who is chairman of the tax-writing House Ways and Means Committee. Though Camp has released few details of the plan, insiders say it would reduce or possibly even eliminate deductions for mortgage-interest payments and related housing expenses in exchange for an overall reduction in the basic tax rate.

Powerful realty groups — including the National Association of Realtors and the National Association of Home Builders — have been joined by several consumer advocates and economic experts to oppose such plans. Cutting housing write-offs would quickly kill the market’s recent rebound, they say, send prices plummeting, cost millions of construction jobs and perhaps even lead to another banking crisis.

Some historians have already labeled this year’s legislative session one of the worst ever, considering the federal shutdown several weeks back and, more recently, the disastrous rollout of President Barack Obama’s health care plan. But there’s a reason to be thankful for those problems: The paralysis in Washington, D.C., has essentially nixed the chance of any housing-related tax reform this year and dims its chances for 2014.

Q. We are updating our living room and kitchen. Should we buy a new television and appliances now, while all the stores are advertising their holiday sales, or would it be better to wait?

A. Despite all those Black Friday or holiday advertisements, homeowners often can save a lot of money by postponing their purchases for a month or two.

Most shopping experts say the best deals on high-definition TVs, especially those with big (55-inch or more) screens, usually are found in late January or early February. That’s when retailers slash their prices even further to entice homeowners and renters who want to upgrade in time for the Super Bowl.

New furniture often is less expensive in January than it is this time of the year, largely because stores want to clear out the last of their inventory before new fashions debut in the spring. Ditto for linens, when most retailers launch their “white sales” with discounts of up to 75 percent, according to www.dealnews.com.

This can be a good time of the year to buy appliances, but you may be able to save a few extra bucks if you wait until the start of 2014, when many stores offer even deeper discounts on the items that didn’t sell over the holiday season.

Q. My wife and I are getting divorced. If she deeds her half-interest in the property to me, can the bank demand that the mortgage be paid in a lump sum immediately?

A. No. Under the federal Garn-St. Germain Depository Institutions Regulatory Act of 1982, lenders are prohibited from demanding a lump-sum payment for the outstanding balance of a mortgage simply because two joint borrowers get divorced. However, if you fail to make your future payments in a timely fashion and the loan falls into foreclosure, your Garn-St. Germain rights will be voided and the lender can demand that the entire balance of the loan be paid off immediately.

Depending on the wording of the original mortgage contract you and your wife signed, the lender may be able to also demand a lump-sum payment if you eventually move out of the house and rent it to someone else. Of course, the loan also will be due and payable if you sell.

Real estate trivia: About 4,300 house fires occur on Thanksgiving Day, according to the U.S. Product Safety Commission, about twice the daily average. Officials blame it on all the cooking that goes on, especially by those who misuse turkey deep fryers.

Ÿ For the booklet “Straight Talk About Living Trusts,” send $4 and a self-addressed, stamped envelope to David Myers/Trust, P.O. Box 4405, Culver City, CA 90231-4405.

© 2013, Cowles Syndicate Inc.