As early as last October, there were reports of fraud schemes and suspicious claims as the tax credit was set to expire and was being considered for extension (see DSNews 10/20/09).   That’s not so surprising, I guess.

What’s shocking is the recent report that prison inmates were able “to apply for and receive $9.1 million in homebuyer tax credits” (see DSNews 6/24/10).  This article refers to a Treasury audit report that further shows that 241 inmates serving life sentences received a combined $1.7 million in tax credits.

This sort of begs the question: what kind of income tax liability can you earn serving a life sentence behind bars?  Is there even any point in a federal tax credit?

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The same Treasury audit also indicates that $17.6 million in claims were allowed for homes purchased before the tax credit program.  It gets better, though, with the reports of post-refund claims resulting in investigation, $785 million, or post-refund claims resulting in denial, $438 million.  The IRS seems to be catching a whole lot more fraud than they miss, but still . . .

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• Homebuyer tax credit audit shows fraud in the millions of dollars (agentgenius.com)
• Prisoners Cash In On the Homebuyer Tax Credit (hsh.com)
• Inmates, IRS Employers Among Those Found to Abuse Homebuyer Tax Credit (blogs.forbes.com)

I just finished reading this article in the LA Times, recently summarized by the California Association of Realtors:

“After shopping for a home, tired buyers often make poor mortgage choices” http://www.latimes.com/business/la-fi-lew-20100606,0,1809394.story

This is so true.  Not all loans are equal, neither are they always what they seem. You should question everything, and everyone, relentlessly, and take your time. You would do as much if you were buying a car.  When you buy a home, you’re really buying a loan.  Do your homework.  Choose your loan carefully, and choose your lender carefully.

Talk to more than one lender.  Ask them to help you figure out what you can afford, and for the two best loans they recommend for your situation.  If you get the same answer from two or more lenders, then you’re getting close.  Again, question everything.  Understand your loan completely. Avoid surprise and frustration.

Finally, work with a lender that you resonate with, one that is crystal clear and easy to understand.  This is important, too. Most stressful moments in a transaction come in the last few days before close of escrow, and my experience is that these moments almost always things that were communicated poorly, or not at all.  You don’t want to find out at the last minute that you need another $10K for mortgage insurance, or that your rate is actually 5.375 instead of 5, or that your origination fee is 4% instead of 1.5%.  You need to be able to communicate clearly with your lender during escrow.

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• Mortgage you don’t know (slideshare.net)

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Most residents I’ve spoken with that oppose the stadium initiative, Measure J, express concern about new taxes, traffic impact and new debt, but the more they learn about the facts, the more convinced they become, as I am that this is truly a no-lose proposition.

Measure J will involve no new city taxes or use of general fund money.  The traffic plan is brilliant.  The positive impact on the local economy is practically limitless: new job opportunities, increased local business revenues, increased property values, etc.

Get the facts for yourself: http://www.santaclarastadiumfacts.com/

Economic stimulus?  Just look at the area of San Francisco surrounding AT&T Park.  In just 10 years since the ballpark opened, the China Basin neighborhood has grown from a barren corner of the bay to one of the most densely productive areas of the City.

This about more than just football; this is about being one of the most significant cities in the country. It’s a singular economic opportunity in the midst of a recession. It’s about jobs, revenues and property values . . . and we only get one shot at it for all time.

Join Santa Clarans For Economic Progress and Vote Yes on Measure J.

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