Dr. Housing Bubble 09/01/09

[Crewleader]

FHA Backed Loans and No Money Down Government Financed Mortgages with Seller Funded Down Payment Assistance: $8,000 Tax Credit Costing $45,000 for Each Additional Home Sale.

In the department of crazy and loony housing ideas, the government has taken the place of some of the defunct toxic mortgage vendors. Some of the popularity of the $8,000 tax credit has gotten many people off the fence to purchase a home. Instead of the Alt-A or option ARM junk, the government is front loading incentives to suck people into the home buying vortex. Let me be clear, this is a tax credit. Got that? Meaning, someone is paying for this $8,000. Of course, we should already learn our lesson that giving front end goodies like teaser rates on option ARMs isn’t a good thing, but what the heck does Wall Street and our government care about long-term sustainability?

The National Association of Realtors is doing 6 percent flips with the success of the tax credit:

“NAR estimates that about 1.8 to 2.0 million first-time buyers will take advantage of the $8,000 tax credit this year, with approximately 350,000 additional sales that would not have taken place without the credit.”

http://www.doctorhousingbubble.com/fha-backed-loans-and-no-money-down-government-financed-mortgages-with-seller-funded-down-payment-assistance-8000-tax-credit-costing-45000-for-each-additional-home-sale/

[Tunkamerica]

1. I am. n/t

[girl gone mad]

2. I saw this analysis on Calculated Risk today.

Kind of shocking.