There is currently a huge push to extend the expiration date on the $8,000 federal "tax credit" for first-time homebuyers and even expand its scope. But should we really spend an additional $16.7 billion lining the pockets of the mortgage industry while millions of Americans face the prospect of foreclosure? Some "experts" say yes.
An article in the Star-Telegram, says that lawmakers are pushing for an extension of the "homeowners' tax credit" to June 30, 2010 and even hoping to offer the credit to homeowners who are not first-time buyers and couple who have salaries of up to $300,000. Many mortgage industry supporters are saying that this tax credit will help improve the "economy." But will it really? This tax credit will not stop foreclosures , it will not improve the job market, it will not put food on the table of America's poor and finally it will probably not have any long-term positive affect on the state of the economy.
Something to Think About
If we did not have the $8,000 tax credit (which expires December 1, 2009), it is very likely that many of those new homebuyers would not have purchased new homes. Those new purchases are helping to increase the profits of the mortgage industry, the same mortgage industry that is failing to do its part in stopping this foreclosure crisis. While the mortgage industry allows homeowners to succumb to foreclosure, they can turn around and resell those homes to new buyers with the help of an $8,000 government handout.
That Doesn't Sound Right
I'm not saying that a tax credit cannot aid some new homebuyers but let's be logical about this. Maybe we should limit which mortgage companies can issue mortgages to buyers using the tax credit. Mortgage companies who are actually doing their part to stop this foreclosure crisis should be the only ones benefiting from any tax credit.