Bill Seeks Expansion of Home Buyer Tax Credit

The nation’s deep recession was created primarily by the subprime mortgage crisis. Though a small share of the total mortgages subprime mortgages accounted for most of the U.S. foreclosures until recently. Unless Congress takes action, we believe the recession will be extended and likely worsened by the recent dramatic growth in prime mortgage foreclosures. Foreclosures on prime mortgages (the vast majority of all mortgages) are increasing very rapidly as growing unemployment and underemployment is leaving more homeowners with good credit histories unable to keep up with their mortgages. At the beginning of 2007 only about 2% of prime mortgages (fixed rate or adjustable) were in foreclosure or more than 90 days delinquent. At the end of the second quarter of this year that number was closing in on 20%. Although the total number of remaining subprime mortgages has declined, the share that were in foreclosure or more than 90 days delinquent has grown from 8% to 27% over the same period. The growing affordability and recent increased sales of existing homes have not solved the problem. A significant factor in the recent growth in home sales is the 10% first time home buyers tax credit, which expires on December 1, 2009. The total amount of time from the beginning of a search for a home through the mortgage financing process and final settlement is normally more than two months. This means that the stimulative effect of the first time buyer’s tax credit will largely be over by the time Congress returns to Washington D.C. next month. Most economists agree that we will have a mostly jobless recovery when our economic recovery begins. That means there is little chance that most of the homeowners who lost their jobs during the recession will be able to find work and resume their mortgage payments. Legislation must be enacted to replace and enhance the expiring first time home buyers tax credit, or the new prime mortgage crisis will almost certainly drag our nation into an even deeper recession. The best alternative to avoid that likelihood is for Congress to quickly pass S. 1230 and H.R.1245. These identical Senate and House bills will increase the expiring 10% first time home buyer’s tax credit limit from $8,000 to $15,000 and expand the credit’s eligibility to apply to any buyer. The legislation would also eliminate the current $75,000/individual and $150,000/couple income eligibility caps, and extend the tax credit for one year from date of enactment. As a consumer advocacy organization serving American Homeowners, we have urged the Senate Finance and House Ways & Means Committees to make the passage of this legislation their highest priority in this Congress. We have also asked our members to use the free Congressional Contact tool on our website to express their views on this legislation to both their Senators and their U.S. Representative. Bruce N Hahn, President American Homeowners Grassroots Alliance www.AmericanHomeowners.org

Support Congressman Cobles legislation on the housing credit: "Congressman Coble’s legislation would remove both the income restriction and the requirement that the home be a first-time purchase."

How is this going to help the people who have bought a home in May of '09 thinking they were going to be eligible to getting the tax credit, but later to find out they are not eligible because there spouse has owned a home before. Is this going to be back dated to all the people who have already received the $8000? Or are people who bought a home during that time just out of luck?