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The Post Gets the Foreclosure Bill Right
Remarkably, the Post editorial writers seem to be the only ones who have noticed that the Senate "Foreclosure Prevention" bill will give banks an incentive to carry through foreclosures. The bill would give a $7,000 tax credit to buyers of foreclosed properties.
While there could be some rationale to having a credit like this for homes that had already been foreclosed and been allowed to deteriorate, it makes no sense to allow the credit to apply to homes where the process has not yet been completed. This effectively gives banks an incentive to carry through the foreclosure instead of trying to work out new terms with the homeowner.
Give the Post credit for catching this one, almost no one else did.
--Dean Baker
COMMENTS (9)
Dean - FYI
The Economist Has No Clothes :
http://www.sciam.com/article.cfm?id=the-economist-has-no-clothes
Posted by: Michael McKinlay | April 7, 2008 10:09 AM
Yes, I also think it gives a tax break to the few rich individuals left that can now go in and buy up all these houses and then they own all the homes and all the land. And the gov't has then subsidized it.
Posted by: EP3 | April 7, 2008 10:37 AM
Dean, I'd like to see your $0.02 on Rice's defense of the US-Colombia "free trade" agreement
http://online.wsj.com/article/SB120752405599893543.html?mod=opinion_main_commentaries
Posted by: El Gringo Colombiano | April 7, 2008 12:31 PM
"Foreclosure prevention" is only a phrase that means one thing to big government/big business and another thing to the American people. It shouldn't surprise too many people that this bill prevents banks from losing even more money due to high foreclosure rates. It doesn't prevent any actual foreclosures, it just makes foreclosure less of a loss for the banks.
Posted by: foreclosurefish | April 7, 2008 1:04 PM
All the Post editorial board had to do was read their own newspaper. Steven Pearlstein laid it all out in a column on Thursday, April 3rd, called "Max & Chuck Show, Cont."
Posted by: A Donsig | April 7, 2008 7:54 PM
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Posted by: isme | April 7, 2008 10:32 PM
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Posted by: isme | April 7, 2008 10:33 PM
This article seems to imply that most people who don't itemize and get the mortgage-interest tax deduction are seniors. But in your previous blog entry, you seemed to have a different population in mind regarding who doesn't itemize. Can you reconcile this or otherwise share some data about rates of non-itemization among homeowners of various demographics?
Posted by: MB | April 9, 2008 2:00 PM
While there could be some rationale to having a credit like this for homes that had already been foreclosed and been allowed to deteriorate
Posted by: 贷款吧 | November 6, 2009 2:48 AM