Add the mortgage industry to the list of groups concerned about the Republican tax plan.
Industry leaders are worried that a provision in the Senate bill changing the time when lenders pay taxes on income they get from managing mortgages could cause some smaller lenders to go out of business, according to Bloomberg.
Lenders currently pay taxes on this service as they receive the money, but under the Senate bill, they would have to pay these taxes upfront. The Mortgage Bankers Association said smaller companies unable to afford this could just abandon the practice entirely.
“It’s a fire drill,” MBA president David Stevens told Bloomberg. “We’re scrambling to get people on phone calls. It would cause a significant disruption in the industry.”
Senate leaders expect to vote on the bill Thursday or Friday, and it is unclear whether they plan to keep this provision in the bill or whether they targeted lenders on purpose.
The Republican tax proposals could have far-reaching effects on the real estate industry, including making it more expensive to own a home and making it more difficult to develop affordable housing, though it would likely be a boon for condominium developers and large real estate corporations. [Bloomberg] – Eddie Small