Something for Everyone (almost) in New Housing Bill

"The bill includes a temporary, $7,500 first-time home buyer tax credit..."

Is this retroactive? :-)

From the NYT article: "The tax credit is retroactive to home purchases on April 9, 2008, and expires on July 1, 2009. If you purchase a home from Jan. 1, 2009 to June 30, 2009, you can claim the tax credit on your 2008 tax return."

Read the full article to determine if you qualify.

Geoff,

Unless I'm missing something, I don't see how this is true, especially in Baristaville:

Besides saving troubled homeowners from foreclosure and stabilizing property values, there are long and short term benefits for most homeowners.

Unless you are selling your home, or going for a reverse Mortgage, or a first-time buyer, or you don't itemize, where's the benefit?

MM,

No it is not retroactive :(

But it's not really a tax credit, it's a Zero-interest 15 year loan - still, at 5%, that's worth about three grand - better than a sharp stick in the eye.

"But you have to pay back the credit over the next 15 years, in equal amounts each year when you pay your federal taxes. That makes this more like an interest-free loan than a true credit."

Getting the maximum "credit" means paying back $500/year, probably not a bad deal considering the average first-time buyer in this area (like me!) is likely to be getting a refund anyway so this will increase it, but I doubt it's something that would make a difference in one's decision to buy or not which is supposed to be the main point.

MM,

Oops, I mis-spoke. Montclairlibn1 is correct, it is a teeny-bit retroactive.

I should have said I don't think it's retroactive enough for you :(

There are a few items buried in the 600 page bill which the NYT?s overlooked.

- The debt was moved up $800 billion in this bill.

- Anyone working in the Mortgage industry will now be required to be finger printed.

- All credit card transactions to be reported to the IRS, here is a piece of this.

Payment Card and Third Party Network Information Reporting. The proposal requires information reporting on payment card and third party network transactions. Payment settlement entities, including merchant acquiring banks and third party settlement organizations, or third party payment facilitators acting on their behalf, will be required to report the annual gross amount of reportable transactions to the IRS and to the participating payee.

Once again they "politicians" are taking our rights away.

No, alas, it is not retro for me.

Interesting -- making easier for people to remain solvent and in their own homes is one thing. Here again the government had to add in something that is monetary incentive for a behavior. In this case, spend money on a house. So all the taxpayers in the country not only have to bail out banks and lenders, we have to pay for their mistakes and help out people who have been harmed and on top of that we will be loaning money to people as an incentive to buy homes. How about the lower prices area already an incentive? Or how about encouraging saving? This adminstration just can't help throwing away our tax dollars.

Jerseygirl, your bias-slip is showing. Throwing away our tax dollars is a bi-partisan activity.

There is no other administration in history that has spent the amount of money this one has - our national debt is almost half of our GDP. But yes, there is plenty of bi-partisan wasteful spending to go around.

Anything for those of us who read our closing docs?

For those who didn't "buy" a home without any show of income?

For those who waited until we could afford a home?

For those who understood an "adjustable" rate actually, you know, adjusts.

No?

Just for those folks who lived above their means and crooked bankers/mortgage folk.

Good for them.

(Those who were lied to by banks/brokers, should certainly be helped. Those that didn't read, should live with their mistakes.)

I agree prof. Blanket bail outs are not a great idea.

As of 10:30 this AM, we found 164,000 Google posts on this bill. The Times piece just scratches the surface. Here's an overlooked bonus for home buyers:

"And then we come to some stuff that will basically be of interest only to real estate/finance professionals and would be homebuyers, but that will likely make complete sense to no one....What the industry has euphemistically labeled as ?Down Payment Assistance?, or ?Nehemiah? programs have been abolished, and, to some extent, the federal government has been assigned to give away free down payments. Nehemiah Foundation found a loophole to facilitate the forbidden act of a home seller giving a down payment to the buyers, but this loophole now closes on October 1st. However, starting with many folks who bought homes as far back as April 9 of this year and stretching until July 1 of next year, there will be a tax credit of up to 10% of the price of the home purchased, capped at $7,500 and scaling down for higher income filers.

A Nehemiah type buyer, then, who used or uses this discredited financing tactic in the window period of 4-9 to 10-1 gets both a free down payment, and a $7,500 tax credit. Folks should take a serious look at getting a piece of this action while it is available."

Am I the only one who wonders if this $7,500 sop from the gubmint will perpetuate the same type of adverse selection problem create by the sub-prime lending market, by enticing folks who are already stretched thin to jump in and buy a home?

"Payment Card and Third Party Network Information Reporting. The proposal requires ..."

Would the purpose of this be to allow the IRS to track what I spend my money on or is it just the total amount?

Is anyone else worried about this?

MMM,

Is this the first time you thought about this?

Ever wonder why, when someone goes missing the first thing they do is check credit/debit use?

THEY ALREADY KNOW!!!

EZpass? They know.
Cell Phone? They know.
Supermarket savings card? They know.

Understand, what most deem "private" is public and tracked.

THEY KNOW.

If you don't like it, unplug and get off the grid.

It's good to know that, once again, my tax dollars are going to pay off the bad decisions of irresponsible people. Too bad I live within my means and make reasonably good financial decisions. Too bad I'm not a burden to anyone.

Cheer up, guido babes. You remain a verbal burden here.

And you brag go, I almost mistook you for Suze Orman for a second.

I also note, your pellagra must be in check lately, for you to be posting so relatively early during the daylight hours.

Did anyone notice this part:
"If you manage to get a new loan, you cannot take out a home equity loan for at least five years after you get the new mortgage. You will also have to pay a 1.5 percent fee each year on the remaining balance. Finally, you have to hand over no less than 50 percent of any appreciation on the home to the government once you sell. Sell the house in less than five years, and you will have to turn over as much as all of the gain."

??

Who gets the 1.5% fee - the lender? for what, making another loan? to compensate for the lower interest rate? to make up for the buckets of money people already made by playing hot potato with shaky mortgages for the past 5 years? OR does the Govt get the fee, to put back in the pot of money that is being taken from my wallet in order to finance this bill? Is that where the $ from any capital gains is going to go? OR will that influx of money go to finance some ridiculous pork-project?

Am I the only one who's annoyed that we've always gotten full-doc, big-chunk o' money down, fixed-rate conventional mortgages, paid bills on time forever, and lived within our means, and now I'm paying to bail out big banks like Bear, as well as small folks who over extended themselves?

Yeah, I know - foreclosures would hurt my home value (even more than it already has been, right?) - and some folks clearly were duped... and yes I know what it's like to be stretched reeeeeeallly thin - I've sweated over whether the money would actually be in the account when the mortgage check cleared ... but I feel more and more like we are are not living in a democratic, capitalistic society.

I agree with you, Kay. The only people who benefit in our society these days are the very wealthy and low-income people (they get all kinds of help and handouts).

I recently found out that I didn't qualify for a stimulus check because I am not in the right income bracket. Am I wealthy? Not my MY definition. Could we use it? Certainly. So there's a lot of folks out there running around buying flat-screen 48-in TVs on my dime right now and I'm not happy about it one bit.

Mrs. Martta:
My stimulus check went to pay household bills, altho Hubby certainly wishes he had a 48" TV to show for it (Giants pre-season is starting soon, ya know!)

While we're griping about it, wait til the credit card bills start coming for those folks with the new TVs, since bad financial management doesn't end with an IRS windfall ... then the money lost by credit card companies and stores (post consumer Chapter 7, that is) will end up getting passed down to you and me.

The trick for you might be, to somehow get your Labby registered as a human dependent under the age of 18! ;)