Loading ...Email provided by Kathy Morrow
Branch Manager/Sr. Loan Specialist for CNN Mortgage, Inc.
Article by Sorohan, Mike
The Mortgage Bankers Association, in a statement submitted to a House committee, urged Congress to extend a popular home buyer tax credit set to expire next month, and to expand its scope.
MBA told the House Small Business Committee the $8,000 first-time home buyer tax credit passed by Congress earlier this year has had measurable benefits to both the housing market and the overall economy, and that it should be extended by at least another year and expanded so that all home buyers could use it.
“The first-time home buyer tax credit has had a stimulating impact on our economy, and MBA supports extending and expanding it so it can help more buyers and sellers,” MBA said. “As we approach the end date of the current $8,000 tax credit, we urge Congress to expand the program to include all home buyers, increase the credit up to $15,000, make the funds available for closing and extend the overall program by at least 12 months.”
MBA noted that the “fragile” U.S. economy is just beginning to show signs of stabilizing, but economic recovery will not be complete until the current oversupply of houses on the market has decreased.
“We should not jeopardize our recovery by letting this tax credit expire,” MBA said. “The home buyer tax credit is helping hundreds of thousands of Americans realize the American dream, and it is creating thousands of jobs that rely on homeownership. Problems in the housing industry led us into a global recession, and housing stimuli can help lead us out of the recession.”
MBA has supported the first-time home buyer tax credit since it first passed Congress as part of the Housing and Economy Recovery Act of 2008 and expanded in the American Recovery and Reinvestment Act of 2009. The Internal Revenue Service recently reported that more than 1.4 million taxpayers have benefited from the tax credit; other reports corroborate that figure. However, the credit is set to expire on Nov. 30.
In June Sen. Johnny Isakson, R-Ga., introduced S. 1230, the Home Buyer Tax Credit Act of 2009, that would increase the maximum amount of the credit from $8,000 to $15,000 and expand the current tax credit so that it applies to any buyer of any home, not just first-time buyers. The legislation also would eliminate the income caps of $75,000 for an individual and $150,000 for a couple under the current tax credit so that there is no income limit for eligibility. It would also extend the tax credit for one year from date of enactment and would still allow home buyers to claim the credit on their 2009 tax return for purchases made in 2010.
Although MBA has seen some improvement in the housing market, it said the favorable impact of the first-time home buyer credit should continue beyond the Nov. 30 expiration date.
“We have an excessive inventory of available homes in many parts of the country,” MBA said. “This glut of existing homes will continue to put downward pressure on home values, which impacts the surrounding communities and perceived homeowner wealth, which is a driver of consumer spending. In simple terms, demand is not keeping up with the current supply. MBA supports tax initiatives that would encourage home purchase activity.”
Specifically, MBA recommends the following changes to the current tax credit:
–Expand eligibility to all home buyers.While the tax credit has proven to be effective in helping first-time home buyers, a large number of Americans are thinking about moving from their current home for various reasons and might be incented by a tax credit to do it now, when the economy needs it the most.
–Increase the tax credit to a maximum of $15,000. Increase the tax credit to up to 10 percent of the home purchase price up to a maximum of $15,000. The credit may include a phase-out based upon adjusted gross income as reported on a borrower’s most recent tax returns.
–Require the tax credit to be repaid in certain instances. The borrower should repay the tax credit only if the residence is sold within the first three years (exception for employment-related moves) or in the event of a taxpayer default on any other mortgage that existed at the date the tax credit is claimed. This would discourage “buy and bail” behavior, where a borrower uses the tax credit for his or her advantage and walks away from an existing mortgage obligation.
–Tax credit should be available for settlement. If practical, facilitate the IRS sending funds claimed by the taxpayer directly to the settlement agent of the property transaction for a downpayment
–Enhancements effective immediately. Any enhancements to the program should be effective on the date of enactment and should be in effect for at least 12 months to ensure the greatest economic stimulus.
Have a Wonderful Day!
Kathy Morrow Branch Manager/Sr. Loan Specialist
CNN Mortgage, Inc. San Tan Mall Office ~ Coming Soon!
2151 East Broadway Road #210 Tempe, AZ 85282
Cell: 480-363-8901
E-Fax: 480-383-6141
kmorrow@cnnmortgage.com
equal opportunity lender
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
Recent Comments