Financial Watch

The mortgage-interest deduction is America’s favorite tax break – and it’s also the costliest.

Between 2009 and 2013, the government will lose out on nearly $600 billion because of it, according to the Joint Committee on Taxation.

While there’s no way to stabilize U.S. debt without making tough choices on the tax and spending sides of the ledger, some sacred cows are more sacred than others. And the mortgage-interest tax break is still deemed untouchable.

Foreclosures in Minnesota rose compared with a year ago, but they’re down from the peak.

Despite an uptick in prices and a more balanced supply of homes on the market – signs that the housing market may have turned the corner – foreclosures continued to increase across the nation in the first quarter.

During the first three months of 2010, 16 percent more households received a foreclosure-related filing such as a default notice or a scheduled sheriff’s sale than in the first quarter of 2009, according to RealtyTrac’s foreclosure market report. Foreclosure-related filings rose 7 percent compared with the last quarter of 2009. Ten states – led by California, Florida and Arizona – account for nearly three-quarters of the nation’s foreclosure activity, the report found.

The goal of the Stimulus package that Obama has recently announced and is often referred to as the Obama refinance plan or Obama housing plan, is to help homeowners make a more affordable payment and thus avoid losing their homes in foreclosure. The stimulus package as offered in the government refinance plan offers the chance for these homeowners to modify their loans and refinance their mortgage.

Below are a few points how Obama’s package may help you:

If your loans are insured or owned by Fannie Mae and Freddie Mac, then you are definitely eligible to do a refinance or get a government refinance plan. You may even qualify for a FHA streamline refinance.

Speaking for the first time publicly, former Washington Mutual chief executive Kerry Killinger said Monday, on the eve of a Senate hearing, that the Seattle bank’s portfolio of subprime loans was modest compared with the bank’s overall operations and shrinking even further as executives of the institution worked to cut its exposure to risk in its last years of independent life.

Killinger gave an interview in response to the initial findings of the Senate Permanent Subcommittee on Investigations, released Monday to the media in Washington, D.C. He also released to the Puget Sound Business Journal, a day ahead of time, the written statement he expected to deliver to the committee Tuesday morning.

Realtors are upbeat about the housing market, and while home sales are up, the prices of those homes are still relatively low.

The housing market may be showing signs of stability. Realtors were busy this past weekend luring buyers in, as part of national Open House Weekend, and they’re optimistic about housing sales.

“We just completed the first quarter of sales and the first quarter of sales, actually, we sold about 3,300 units and there’s about 9,000 units of inventory on hand currently,” said DeDe Ross, a realtor with Keller-Williams Realty.

The Obama administration plans to implement new measures to slow the pace of home foreclosures, even as concern grows about the effectiveness of the federal government’s expensive intervention program.

White House on Friday will announce changes to its Home Affordable Modification Program (HAMP) that will include financial aid for unemployed homeowners, a new emphasis on writing down the principal of troubled loans, incentives for the holders of second mortgages and greater opportunity to refinance under the Federal Housing Administration.