A Modest Proposal

Everyone is aware of the mortgage crisis and US Secretary of the Treasury Henry Paulson addresses the situation. I would like to make a modest proposal to help insure that the situation does not repeat itself.

It seems to me that the situation was caused as much by people serially refinancing their mortgages as it was by first time buyers who were unqualified for a loan. I would suggest studying the "bad" loans caused by multiple refinancing to find out the most common time frames but in lieu of that hard data - I would suggest taking away the tax-deductible status of any mortgage that is the third mortgage by the borrower within a 5-year period.

People use their equity to pay off credit card loans when the tax deductibility for mortgage loan interest was never meant for such purposes. It was supposed to make home ownership more attractive and affordable. Not credit card binges. If you treat interest on mortgages the same as interest on credit cards for serial refinancers - then the incentive to refinance goes away.