First time homebuyers tax credit - Who is frauding who?? - Possible extension?

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Mortgage and Lending with Social Media - Infinity Home Mortgage Company, Inc

 

 

A lot of chatter about the First Time Homebuyers Tax Credit

 

 

printing money - the stimulus package

Let's start with the basics about the First Time Homebuyer's Tax Credit....

  •    Yes, it has helped some that might not have bought.
  •    It has given people money after buying to help fix up their homes, pay off debt, or save for emergencies.
  •    And ___________. ...  wait, I really can't think of anything else.

 

Has the Tax Credit been a mechanism that has artificially stimulated the economy?  Some will say yes and some will say no. I will be one of those yes people.

 

 

People, we are printing money at record paces that our checkbooks will never be able to pay off.  The ATM has crashed…..

 

 

 

From day one, I have been against the tax credit for the most part. I have had my reasons, several of which are starting to show now than later. Yes, it has helped home buyers and it has helped the economy some. But is the damage greater than the good that it was suppose to have done?  Yes and there are now news reports giving startling facts. Here is an excellent article from USA Today.. - Home buyer tax credit fraud called 'disturbing'   Here are 3 disturbing facts mentioned in the article....

 

first time homebuyers tax credit

 

 

 

 

 

**Costing the government $10 billion.  I don't think the government are the ones that write the checks from their own bank accounts. Shouldn't it say, this will cost the American Public $10 billion?***

 

 

first time homebuyers tax credit

 

 

 

 

***Gee, an additional $17 billion.  I thought the first time homebuyers tax credit was suppose to stimulate the economy, not weaken it. People, who pays for this?  We the tax payer.***

 

 

first time homebuyers tax credit

 

 

 

 

***Apparently our kids haven't learned much in school about fraud. Could these be are next wave of harden criminals?  And a 4 year old?  I would have to assume that a parent filed that on behalf of their child.***

 

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Here is another article by Jackie Calmes with similar answers, but that she also shares some more cold facts that seem scary to me. Home tax credit audit shows abuses -

 

first time homebuyers tax credit fraud

 

 

 

 

 

 

***Claimed the tax credit, yet didn't buy a house yet.  I wrote about this in May of 2009. Fraud Alert on the First Time Homebuyer Tax Credit - Do you chance it? - There have been some realtors that basically told me that nobody would commit fraud on this. I even had one realtor tell me that they had a woman that worked for the IRS that got her money before she bought her house. I truly respect this realtor also. But he was very protecting of his buyer, stating that she would never commit fraud because she worked for the IRS. People, I don't care who you work for, greed will get the best of you at times.***

 

 

first time homebuyers tax credit fraud

 

 

 

 

 

 

***Now the government is saying that we still have a weakness in the housing market.  Yet they will go on and get the media to state that the recession is over?  Jim Crawford brought this to our attention in his blog post, I'm so happy the recession is over! Aren't you? - I am tired of misinformation and politics. Will we ever get the truth?  People, I think we don't need to hear it, because the writing is on the wall. Have we forgotten how to read?  Or do we need people to tell us what we want to hear?  hhhhmmmm***

 

 

first time homebuyers tax credit fraud

 

 

 

 

 

 

***Imagine that, a politician needing to be re-elected again and possible trying to push something that might actually hurt our economy instead of helping it.  now, this is based on my opinion, but I didn't see this tax credit getting us out of the mess or even truly helping the housing market for the most part.***

 

 

 

Conclusion : What crawls under my skin is not only do the lawmakers on Capital Hill want to extend the Tax Credit, but that they want to increase it to $15,000.  Why?  What is really wrong with $8,000??? And why can't we go back to the re-payment schedule that was applied in the very first tax credit, when the $7,500 first time homebuyers tax credit was introduced.  Seriously, what is so wrong with this? Free is not free.  One way or another, we will be paying for this anyhow.  Some of you scream about people having skin in the game, when buying a home.  Yet some of those same people don't seem to be screaming about having skin in paying back the tax credit.

What about those politicians that just want to sign bills and pass them, just for the sake of getting votes for when re-election time comes around. Yet these same people don't take the time to do proper studies to see if this is actually working as planned. Is this all smoke and mirrors for the most part?  Do many of you actually pay attention to this? Or do we just go along with the crowd, because it seems better than what we currently have?  We need to think about this and not just roll over in our graves, which could be sooner than later. What say thee?

 

 

 

 

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Re-Blogged 5 times:

Re-Blogged By Re-Blogged At
  1. Gabe Sanders 10/26/2009 11:35 PM
  2. Mark Watterson 10/26/2009 11:53 PM
  3. Bill Ladewig 10/29/2009 04:42 AM
  4. Dana Devine 12/14/2009 02:14 AM
  5. Marzena Melby 12/29/2009 06:12 AM
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Rainer
262,017
Phil Graves
utahbuyeragent.com - Orem, UT
Utah Buyer Agent

Jeff -

Great article!

 

Thanks for the info.

 

-Phil Graves-

utahbuyeragent.com

utahbuyeragent.com logo

Oct 26, 2009 03:49 AM #1
Rainer
229,238
Ryan Shaughnessy
PREA Signature Realty - www.preasignaturerealty.com - Saint Louis, MO
Broker/Attorney - Your Lafayette Square Real Estate Partner

Jeff - We read the same article.  There will always be fraud when there is no verification like requiring a copy of the sale contract, recorded deed or HUD1 be attached to the return.  I doubt that this news  really surprised anyone.

Oct 26, 2009 04:17 AM #2
Rainmaker
1,091,906
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

I say thee is right on.  In any government sponsored give-back program there will be fraud and with the number of applications for this credit rising, the deceit will grow.  I think the program should end and the market forces allowed to behave as they will. 

Oct 26, 2009 04:26 AM #3
Rainmaker
413,205
Lisa Heindel
Crescent City Living LLC - New Orleans, LA
New Orleans Real Estate Broker

I stupidly assumed that there would be some type of documentation requirement such as a notarized HUD-1 to claim the credit.  The government opened the door to fraud wide and they need to close and lock it now.  In my opinion, the credit didn't help anyone buy - it may have pushed up the time frame for some people, but it didn't help anyone who didn't already have down payment funds and the ability to qualify for a loan.  I'm so glad that I'm footing the bill for a new home owner's flat screen TV.

Oct 26, 2009 05:31 AM #4
Rainer
67,579
Jay-Paul Lowry
Riverside, CA

i heard the 4yr old claiming it on talk radio...i was so pissed. what did we expect jeff? typical government program, fraud and waste abound.

 

JP Lowry

Oct 26, 2009 07:46 AM #5
Rainmaker
52,501
Roy Paeth
Keller Williams Inspire - Geneva, IL
Just a regular guy helping real people!

Jeff. I really wonder why seller assisted downpayment couldn't have been tweaked instead of eliminating it completely. Geez how much would the tax payers have saved if a program that worked was not done away with. If we really think about it, say Mr and Mrs Potential Homeowner borrow the down payment from Mom and Dad who they payback when they get the tax credit. Do they really have any more skin in the game then if the seller assisted with the down payment? The money is either Uncle Sams or Mr Sellers but in both cases the buyer has very little of their own money into the game.

Oct 26, 2009 10:13 AM #6
Rainmaker
1,071,801
Barbara S. Duncan
RE/MAX Advantage - Searcy, AR
GRI, e-PRO, Executive Broker, Searcy AR

I'd like to see the time to close the loans extended by a couple of weeks because there is no way they'll get everything finished by the end of November.  So if the loan is in the process, let it finish, but don't let others begin.

Oct 26, 2009 02:57 PM #7
Rainmaker
4,797,811
Gabe Sanders
Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales - Stuart, FL
Stuart Florida Real Estate

Jeff, it will be interesting to see what happens with this.  It can definitely help keep the momentum going for real estate.  Worth a re-blog.

Oct 26, 2009 11:34 PM #8
Rainmaker
225,588
Mark Watterson
Salt Lake City, UT
Utah Real Estate

Like you pointed out.  There is a big disconnect in the thinking process.  The government is spending our money, our children's and children's/children's money.

The last crash was caused by having a negative saving rate in the country and it was nothing compared to the one coming if we continue spending money we don't have on a national level. 

There is no one big enough to bail out the government and printing presses can only do it for a short time.

Oct 26, 2009 11:52 PM #9
Rainmaker
225,558
Tim Bradford
Cleveland, OH
NMLS 250013

Jeff, If I read your summary correctly, I believe you might support the program as long as the Repayment Provision is part of the program.   If that is the case I would agree.   Instead of a Hand Out that the current program is in my opinion.   The Required repayment can be viewed as "Skin In the Game" because they have to repay it.   Granted Zero Interest, but there may be some value to the believe that people that get the money, might make improvements or otherwise something that might spur a positive economic direction.  

Oct 27, 2009 05:38 AM #10
Rainer
336,160
Chip Jefferson
Gibbs Realty and Auction Company - Columbia, SC

The alarming fact is that millions will be and have been fraud-ed out of our back pockets and our future generations. When will the waste end? NEVER!

Oct 29, 2009 04:51 AM #11
Rainer
288,479
Thomas McCombs
Century 21 HomeStar - Akron, OH

What needs to happen in order to get us thru this great recession is that consumers must feel confident enough to resume spending money.  This economy is dependent on those consumers. If we can get folks buying flat screen tv's again then the people who work at the flat screen tv companies will return to work. They will buy furniture, then we have more folks who can go out and buy cars, and then more and more people can travel, etc.

If the tax credit stimulates the purchase of flat screen tv's, then hooray for the tax credit.

As for the concern over government deficits, as I have posted repeatedly, everyone is agin' it, but not if it affects a program they like! Remember who the govenment borrows from -- it is from you and me. Government bonds, bills, and notes are bought by us thru our money funds, pension funds and our personal investment programs. If the government was not borrowing this money then interest rates would be even lower than they are now because interest rates are dependent on supply and demand. If demand is increased (think government borrowing) interest rates tend to rise. Those of us who have money to invest like those higher interest rates!

Things are never as simple as they seem, and "this is a great time to buy a house".

Akron, Ohio

Oct 29, 2009 01:22 PM #12
Rainmaker
800,270
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

Maybe we just need to realize that our economy needs to be different. Why do we need an economy that insists everyone spend money rather than save? Why is it that shares are only worth more if the company shows enormous profits each quarter rather than good plans long term? There is fraud because of the enormous greed that has arisen and lust for everything to be new and bigger. Because of this companies lay off workers and move abroad because it is cheaper. Now we have workers who have no jobs rather than steady employment. Is that better? Of course not.

Is the tax credit causing buyers to be pulled forward just as many of these sub-prime loans did? Again we see this mentality to only buy those items on sale...houses are selling because they are priced below market value and you get a coupon for a tax credit.

Is the alternative any better? Could we and the rest of the world have survived a total collapse? Many places in America are suffering with boarded up shops and homes. All we can do right now is wait and see how this plays out, some will be winners and some will be losers, as realtors we need to adjust and help everyone through the changes that are happening makeing sure they understand what they are buying. A home, a shelter, somewhere to entertain friends and family.

Oct 30, 2009 06:35 AM #13
Rainer
41,131
Patrick Randles
Nova Home Loans - Tucson, AZ

Jeff,

I am with you, unpopular as it may be, the tax credit doesn't make sense in my opinion. There is no free lunch. Can we start moving back in the other direction? Let the government contract and the markets determine the economy. Good Post!

Patrick

Nov 12, 2009 06:01 AM #14
Ambassador
1,256,459
Jason Crouch
Austin Texas Homes, LLC - Austin, TX
Broker - Austin Texas Real Estate (512-796-7653)

Hey man - Long time no see.  I hope you're doing well.

Dec 03, 2009 11:52 AM #15
Ambassador
296,390
Tim and Pam Cash
Crye-Leike (Sango) - Clarksville, TN
Real Estate Professionals - Clarksville TN

Jeff, we certainly miss your posts - hope you and yours are well.

Dec 10, 2009 12:28 PM #16
Rainmaker
210,056
Marzena Melby
Coldwell Banker Burnet Realty - Richfield, MN
Realtor, Twin Cities Minnesota Real Estate

Jeff,

Thank you!  I just flagged it for a feature.  This article needs to read by many.

Dec 29, 2009 06:09 AM #17
Rainer
334,480
Tom Davis
Harrington ERA,DE Homes For Sale, $$ Save $$ Buy Today ! - Dover, DE
FREE Delaware Homes Search!, $$ Save $$ - Find Homes! Delaware Realtor

I agree with that above comment, WHEN WILL THE WASTE END? NEVER???  GEEE WHIZ!!  It is incredibly crazy the AMOUNTS OF $$$$ that is being spent!

OUR GOVERNMENT IS REBELLING OUT OF CONTROL IN MY OPINION!!

THANKS

TOM DAVIS

Jan 21, 2010 03:13 PM #18
Rainmaker
98,213
Chuck Ward Local Video Marketing
Florida Mobile Fusion Mobile, Marketing, Local SEO - Tampa, FL
SMS Marketing, Google Plus Local Pages

Last time I checked however, IRS is now requiring copies of everything to verify and are scrutinizing the tax credit closer -- I will have to see if I can find that article

Feb 01, 2010 04:40 AM #19
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