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.

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.