You cannot blame the mortgage crisis on the mortgage deduction.
You cannot do it. The mortgage deduction has been around for a long time, and helped millions of people to achieve home ownership without any negative effects whatsoever.
Blame the crisis on the lending of money to people who had either no intention or capability to pay back borrowed money.
People did refinance beyond their means, but THAT was not the core of the rotten tree.
Take away the mortgage deduction and prices will lower to compensate. That's what markets generally do when you remove a government subsidy.
The core of the problem is that banks and their employees would approve loans with minimum documentation, even encouraging people to lie about their net worth, because they got commissions, and then could bundle and ship the packages of mortgages to unsuspecting investors who were stuck with the results. I know we don’t like regulations, but there have to be some controls against dishonesty by those with experience who should know better and hew to some sort of ethical standard and don’t.
Exactly. Crisis in mortgages was due to the mers system, bundling, cra, fanny and Freddy, wall street fraud, etc, not the deduction.