Maria,

You are a prime example of why the blame cannot be put on the “Lenders”. YOU made the responsible decision to not purchase a house and join the “so called American Dream”, because it would have put you in a financial hardship. You’ll see that the decision you made will make your immediate quality of life better.

I actually just closed on a house, and the only reason I purchased was because I felt that it was the perfect house for me, in a price range that was well within my budget. The $8k was not a factor for the simple fact that when the $8k credit expires, then house prices will adjust downward to compensate for the fewer buyers, and if Interest Rates go up soon (I expect in 4 years we’ll have quite high Interest Rates) then we’ll see housing prices again drop to level out the afford ability index. I would much rather buy a house at a lower price with higher interest rates, then high price and lower rate, but like I said.. the house was perfect for me and my family for our first house (location was the biggest deal and the area we moved into was only a 136 house tract).

I applaud you for your responsible financial decision Maria, and hope others start to realize that losing their houses is partly THEIR faults for a decision THEY made.

Also, housing will not be a V shaped recovery .. it’ll be more like an L .. dropped hard then flat while banks “drip out” their inventory.

It’s going to be interesting to see what they do with the $8k credit come expiration time on Dec 1st. Will they extend it? Will they modify it?

So if I find a house this year, I can amend my 2008 taxes and get up to $8K tax credit… I meet the requirements. Loan approved for $xxx amount.

But if i buy next year and the $15k tax credit passes, I’ll get only up to whatever my tax liability will be? is that correct?

Not being refundable means the most you’ll receive back is your tax liability.

If you paid 8k in taxes, and had a tax liability of 7000 (without buying a house) you would receive a 1000 refund. However, with the 15k tax credit, your tax liability would be moved to 0 (since it’s under 15k) and you’d receive your full 8000 that you’ve paid in taxes.

Let me get this straight

The $8k tax credit is refundable, therefore you will get the full amount..

The $15K is not refundable and is paid over 2 years at $7500 each year?????

Sorry, Im so confused… I don’t know if i should wait it out… “IF” the $15k bill goes through does that mean I’ll get up to a refund of a $15k tax credit paid over 2 years?

Which deal is better? $8K or $15k? thank you… sorry to ask questions that you’ve already heard/read about… thanks for any help…

Hi Matt,

Which legislation are you commenting on? The $15,000 or the $8,000? You will qualify ONLY for the $8,000 (as long as you meet the requirements) UNLESS for some reason they change the current wording of the non signed $15,000 bill to be retroactive for the year.

With that said and in easier normal terms you will (as long as you meet the income / first time home buyer etc etc) qualify for the $8,000.

Hi Judith,

As I’ve commented before I do NOT think that this bill will be passed while leading economic indicators are pointing to a recovery. Although I personally think the housing market is at a false bottom and NOT in recovery mode.

Also, with the worries of Inflation, and other Countries that hold our bonds questioning our spending we may never see it passed.

On another note.. something to watch for is increased rates sooner the originally expected. The good “economic indicators” is a double edged sword as fewer people will go into treasuries and more into equities.

If you’re rate protected with a floating option.. I hope you’ve locked prior to the re-prices for the worse today as MBS’s were slammed pretty hard.

And taking $8,000 is quite good, esp since the $15k details haven’t been sorted and could be WORSE then the $8k (i.e. a Loan)

You are using an instance where someone is really close to the income limit (or below to make the most out of it). But the fact the 15k credit (since it also removes the upper income limit) indicates to me that it’s ment to target the jumbo loan market where those peoples liabilities are well above that limit (even with current write offs etc).

A reason I think they want to include that group is because jumbo loans are failing at a faster rate then every before (if I recal correctly there was a 40 month supply of houses over 750k on the market.)

We’re not out of the woods and a double dip recession due to financial system rebalance (moving loans back onto the books), commercial real estate and jumbo loan failures (1 jumbo loan is like 3 regular foreclosures) the ripple effect can be devistating. My hope is that spending is slowed and the rate of inflation five years out isn’t massive.

Hi Jeff,

The credit is def a double edged sword. Also, to say that “help to those underwater” is not available is incorrect. There are many services that are out there to help, it’s just reaching out, and trying to get the modifications (although the Loan to Value should be adjusted to something like 125 – 130%.

The incentive is really to up the First Time Home Buyer %. Because if credit was for anyone, then people would walk away just to buy.

I think the problem really is the banks. The current administration has had their book values “softened” so much, that when these banks do loan modifications or sell a distressed home they are moving from an off-balance sheet “non-performing asset” to a realized loss, which hurts their investors. I think too much is being done to protect these banks and their book values. (why do you think foreclosures are at records, and inventories have been falling at a far greater pace? because M2M suspension supports peak values and not current values thus inflating their assets, which lessens their loss %). There is good news, starting reporting periods AFTER Nov 15th (lets hope this doesn’t change) banks will be required to put more on their books from their off-balance sheet losses. This will better show the insolvency of our financial system and take the smoke and mirrors that has been given to the country. I have no trust in our banking system, and think our administration should be dis-appointed that they are protecting them at this level (giving them tax payer money while they claim record profits).

You know the government has said we are “out of the recession”, but with a decreasing housing outlook. If this was a housing and credit led recession, and credit card, mortgage, equity lines of credit are all at RECORD levels, how can the country have gotten out of a recession? The logic isn’t there, and I’m not buying it..

But yeah.. man what a blab this comment was.. I agree, it’s bad in a sense (for the ones that believe they should get something), but worse in the sense that it’ll push inflation (which again the government says is under control). I think they’ve over corrected the deflation and inflation will be quite rampant in about 4 – 5 years, and even worse if the Health Care Reform in its current form is passed.

My best guess is that the $15,000 credit will be put in place after the historically high seasonal demand period. The summer time has higher demand, and with decreased inventory (due to moratoriums) prices have edged upward thus providing a “false bottom” in the market. While demand has increased and inventories have decreased during the summer months, the need for “stimulus” decreases.

Now when this demand decreases, and the supply again increases (the houses are there, and ready to be moved onto the markets) then another increase in incentives will most likely get more backing and get better steam.

Until this false bottom finishes I don’t see an increase or change in the Housing Credit. With that said, I expect the end of summer to be a hard time for the housing markets and a time where we’ll see increased supply, decreased demand ( seasonal data ) and again downward pressure on prices (based on Supply and Demand).

The other variable will always be rates. If rates increase too much then prices will have further to fall to keep the afford-ability index at a level where houses were selling well. If rates sink (which IMO would be caused by a steep decline in the US Equities market) then increase buying and refinancing and loan restructures would take place.

But as of now.. it’s not going anywhere..

any updates? any good guesses?