The Tax Reform Act of 1986 made home equity loans more appealing by:

Question

Quizplus · Accepted Answer

The Tax Reform Act of 1986 eliminated the tax deduction of interest on consumer loans not secured by real estate, making the interest on home equity loans more attractive to borrowers as it remained tax-deductible. The Act did not allow banks to lend up to 125% of the equity in a home, prevent homes from being liquidated in Chapter 13 bankruptcy cases, or reduce bank income taxes on mortgage loan income. Thus, options B, C, D, and E are incorrect.

The Tax Reform Act of 1986 Made Home Equity Loans