Homebuyer Tax Credit Causing Chaos

Sept 18, 2009

It seems as though the Federal Homebuyer Tax Credit in 2008 & 2009 did it's job to help boost home sales, although hundreds of thousands who took advantage of the credit are now be told by the IRS that they'll have to give it all back.

In it's typical fashion, the Fed has created confusion, and chaos with misunderstood stipulations, changes mid stream and language that even those who wrote it would be hard pressed to understand.

Over 2.6 million supposedly eligible buyers bought homes and filed for the credit receiving a total of approximately 19 billion dollars in tax breaks. Nearly half of those who received money for the credit on 2009 tax returns will have to return it according to a Federal audit by the U.S. Treasury. Additionally a recording error may cause the IRS to seek repayment from tens of thousands more even though they are entitled to it.

Part of the chaos is a result of Congress enacting 2 different types of credits according to when a homebuyer purchased a home. The rules in 2008 required repayment of the credit up to $7500 over 15 years. A zero interest loan. Congress later changed the program for buyers in 2009 eliminating the repayment requirement, although those who purchased in 2008 are still obligated to repay. (See my blog Homebuyer Tax Credit Changes.)

Confused yet? Don't be it gets better ! Apparently the IRS contributed to the chaos by recording the wrong purchase dates for approximately 73000 homebuyer in 2009, meaning that they will be asked to repay as if they purchased in 2008 under the first version of the bill.

If you purchased a home recently and took advantage of the credit, as many of my own clients did keep good records and have your accountant review the credit requirements with you. There so many variances and stipulations related to this tax credit that I would be all day listing them and in the end listing them in vein. After all the IRS, Treasury and Congress can create confusion whenever and wherever they choose to now can't they?

See my blog on Homebuyer Tax Credit Changes for more on the differences between the credits, purchase dates etc.

George Sinacori

GES Real Estate, LLC

561-306-6736

rebuygeorge@yahoo.com

Lenders Fail to Modify Homeowner Loans

Politics and corporate greed continue to eat away at the hearts and wallets of American homeowners and the American dream.



According to Bankrate.com just 2000 homeowners have received loan modifications beyond the typical 3 month trial period nationally in the 7 months since the administration issued it's guidelines to lenders in order to help homeowners avoid or avert foreclosure. That equates to approximately 4 successful modifications per month per state. Lenders will typically stall short sale efforts simply because they can't see beyond dollars and cents. If the Bankrate.com information is correct they have danced around and away from folks asking for modification assistance and the Fed isn't concerned.



The Obama administration's claims of 500,000 homeowners being helped may be little more than political grandstanding again at the expense of homeowners who have been brought to their knees financially leaving many without any other recourse but to eventually walk away and try starting over somehow.



If you need help or have question regarding todays real estate and mortgage markets in SE Florida please call me directly 561-306-6736 or email your questions to rebuygeorge@yahoo.com Find more information about the SE Florida Real Estate market at GES-Realty.com