Dennis' Mortgage Blog

Just saw a news release that the National Association of Home Builders is asking the Senate to "quickly pass" a $10,000 tax credit for homebuyers.  They want this to reduce their inventory and to stimulate the housing market.  Why don't they just lower their asking prices?  Tax payers are being asked to subsidize people purchasing new homes so the builders can maintain their profit margins?  That is chutzpah!

The argument by the NAHB of helping "to stimulate the housing sector and prevent the economy from spiralling into recession" is  just laughable.  The only concern the NAHB has is for the profits of their members, which is understandable, to use tax payer money to support and generate those profits however is wrong.  The builders have excess inventory because they built too many homes for the market.  Because of their inability to properly guage the market they should be bailed out?  Again, if you have excess inventory lower your price or hold the inventory, do not ask the government to create a false market using our tax dollars.

What about people purchasing existing homes? Why should they not get a tax credit for $10,000?  At least that would help two families: the family purchasing the home and the family selling the home.  Homeowners already get a very good tax credit, the mortgage interest deduction.  While that deduction may get repealed for California homeowners if Sacramento Democrats have their way, it still exists on the Federal level. 

I will repeat what I have been saying for years, but more frequently for the past several months:  the government position on the “bailouts” for the housing industry should be limited to a) raising the loan limits—which has been passed and should be effective in the next few weeks and b) create a national lending license that every individual in the country who takes applications for home loans and mortgages must hold—every mortgage broker, every S&L loan officer, every credit union employee, every direct lender, every website customer service mortgage advisor; all of us must go through a difficult process and exam to get a National Mortgage Lending License.  No more credits, bailouts, payments, judicial renegotiation of notes, let the markets do their job.

By the way, I saw that one of the golf stores is having a sale to "blow out" excess inventory--how about a $500 credit so I can get some new wedges and we can also stimulate the golf industry?

Dennis

Wednesday, March 05, 2008

This also posted on the Long Beach Post at www.lbpost.com My Front Porch