First-time homebuyer money to be extended or expanded? on clarkhoward.com

It's amazing how much our show has become influenced by Washington, D.C.'s involvement in capitalism. It's hard for Clark as an avid free marketer to stomach the fact that so much of the show is now driven by his response to D.C. financial policy.

Here's yet another example. The housing industry is at the trough on Capitol Hill trying to get the $8,000 first-time homebuyer credit either extended beyond Nov. 30 or expanded up to $15,000.

Now the New York Times reports that 4 out of 10 houses sold this year were sold to people taking advantage of the credit. Free money is a good thing, right? Well, not exactly. This is taxpayer money and it creates a false support under our housing market.

First, you have the feds guaranteeing 90 percent of mortgages in the country via loans owned by Fannie Mae, Freddie Mac, the FHA or the VA. Second, you have the feds giving out this first-time homebuyer cash for people to go out and purchase a home. False support all around!

The fact is that we overbuilt way too much. It will take awhile for the housing market to get healthy again. We have to decide if we are going back to a free market system or if housing should become a longtime ward of the taxpayers. Is it fair for those who own a home to subsidize others who want to purchase one at this point in time?

What others are saying

And another thing!
Its my experience while shopping for a home, that the areas with the most foreclosures are not the low income areas that people want you to believe. No. the low income areas may have a lower home value. But its the so called "well to do" folks who have bitten off more than they could chew with their over priced homes and over extended credit lines, who are losing the shirt off their backs because its time to cash the checks they've been writing.

Two homes identical in every way that cost the exact same to build, but one is worth $80,000 and the other half a million? So the guy who has nearly half a million in "equity" immediately has all kinds of imaginary "credit" and "wealth". So when the market crashes and that imaginary line disappears....

its time to blame the poor folks.
This country is ridiculous.
By cyrus26 @ 09/23/09 11:30:20 PMreport abuse
Clark against housing credit?
During your rise in wealth over your lifetime Clark, I am sure you have benefited from some tax credits and kick-backs. So, I thing you may being a bit hypocritical to have a problem with everyone else benefiting from some type of credit for a change. I make $40,000 a year and give nearly $9,000 away in taxes that pay for wars, public assistance, over-payed politicians, credits for foreigners to start a life or business or school here, etc, etc.. SO WHY CANT I, FOR ONCE BENEFIT IN SOME WAY FOR MY FAMILY TO HAVE A LEG UP IN THIS WORLD? You give some good advice, but need to cut the Capitalist crap. It conflicts with your "helping Joe Everyman" theme.
By cyrus26 @ 09/23/09 11:08:30 PMreport abuse
$8,000 New Homebuyers Credit
Unless people have the strength to fight back, your mortgage broker may get all of that money in closing costs. My brother's closing costs amazingly had shot up from around $4,000 to over $12,000 which was pretty much the $8,000 credit money plus all the rest of his cash on hand with all the things they added along the way. The broker had the audacity to tell him not to worry about it since he'd be getting the new homebuyers credit - guess she thought it was hers to have the way they wrote the loan! In any case, he told them he'd walk away and found out the money that had been added along the way was mostly false fees since it went right back down to under 4,000 when he was putting the brakes on the deal. The real estate agent was even getting $1,000 tacked on in addition to her commission. I'm sure the people who thought up this credit didn't intend for your real estate agent and mortgage broker to get most or all that $8,000 but I'll bet you they are in many cases.
By Robert @ 09/21/09 10:33:28 AMreport abuse
Housing
Instead of building houses we should
tear them down and build factories.
We have too many homes and not enough jobs. Like "teach a man to fish".
By Tim @ 09/20/09 10:55:16 PMreport abuse
housing credit
I believe it is a good thing to give the more time. Yes it is supportive(sortta like the Clunker program), but it is going to get more houses off the market. Anyone who qualifies would be dumb not to take advantage of the low interest rates and gov. credit. If they have enough money for the downpayment many brokers can roll the closing costs into the loan and ,wahlah, new homeowner.
The government has always maintained that helping first time homebuyers makes good sense as it raises a person or family to middle class. It used to be thought that they were likely to work harder (and pay taxes) to keep their homes. It makes communities and housing values stronger and reduces the number of vacant houses. With the Government owning most of the mortgages through the above mentioned companies they are betting twice that the new homeowner will keep it going on their own. If they do, then the governments (Fed and Local) get more taxes... and the banks get more interest coming in...

I swear when i first saw an amortization chart, i thought they were joking. Mortgage rates, even when low, have to be the biggest money making deals ever inflicted on the consumer. Banks are getting rich off of the people who do pay and should not be crying about the ones they lured into crappy loans that defaulted.
This credit mainly helps the banks to write more loans, helps homeowners trying to sell, the real estate industry and mostly the first time homebuyer...it is at our expense, but if the builders stay too scared to keep pumping out new homes, this will help shrink the inventory of vacant homes, and in the long run, strengthen our communities and home values. Which in my book is worth the expense if it can heal the housing crisis.
P.S. I am a little mad and jealous that I can't get in on it.
By Dave @ 09/18/09 05:31:34 PMreport abuse
RE: Dumb Dumbs
Most of the trades you mentioned are mainly Illegal immigrants (at least here in Ga.) ..the home Builder and appliance maker won't spend the money on local business and the illegals wire most of their pay home.
As one person complained there has always been gov help for first time buyers, the $7500 was actually a loan (no interest)that has to be repaid..the big incentive was the $8000 Government grant that doesnt have to be repaid...this is to help out people like me who want the housing market to get back to normal levels of supply and demand....I wish they would have had the $8000 one two years ago when we were trying to sell our townhome, it was on a stale and degrading market for over a year. After we came down on the price a couple of times and still had no interest, we turned it into a rental until the market comes back.
We are heavily overdeveloped on residential and commercial properties in all the metro Atlanta counties...empty strip malls everywhere, Idiots think the same 5 mile stretch of road can support 20 nail salons, cleaners, sandwich shops and such...even larger shopping malls are empty because they build newer ones near them. The residential building slowed down so much, a good bit of our 200,000+ illegal workers went elsewhere due to lack of jobs. Us dumb dumbs got to find the silver lining in the situation.
By Dave @ 09/18/09 04:46:13 PMreport abuse
I'm with you, Clark. The government can't support everyone forever. And I agree wholeheartedly with those asking, "Where's mine?" We bought a home in December 2004, suffered a layoff and a reduction in hours in 2006/2007, and got behind on our mortgage. There's been no help and no tax credits for us. We could have been foreclosed on, but we worked our tails off (I had a full-time job and two part-time jobs for six months)and now we're current and back on track. We helped ourselves, and I'm getting tired helping those who won't. I also feel bad for those who can't get ahead or even catch up in this economy. Find a way to create JOBS, Mr. Obama, not more hand-outs!
By Elizabeth @ 09/18/09 01:11:15 PMreport abuse
dumb dumbs
this isn't about you or home buyers dumb dumbs. This is about employing home builders, construction workers, cabinet makers, appliance manufacturers, land scapers, etc.

When they have money to spend, they will spend it on your business and provide you with money who will then spend it on another business. (Of course, this will all be a wash after your taxes increase and hyper inflation hits...hahaha.
By Socialist Sam @ 09/18/09 12:42:30 PMreport abuse
IOUSA
Is the title to a movie that every single American should watch. Although some of the movie hints at liberal solutions to the problem, it, nonetheless, does a good job of explaining why our country is in seriously deep financial trouble. News flash: There is no SS trust fund. Nor is there a fund to provide Medicare benefits to the 6,000 per day who are reaching the age of 65. Where did the SS money go? Our politicians spent it on federal T bills (loans to the govt.) If a private fiduciary did this it would be a crime. If the level of ignorance of the general populace continues, we are f'ed. The government cannot afford even one more dime of spending. None.
By David @ 09/18/09 12:41:41 PMreport abuse
Extending Home Buyer Tax Credit
No, no, no. I have had it with this administration's freebie mentality. IF YOU CAN'T AFFORD IT, YOU CAN'T AFFORD IT. Simple as that.
By Beth @ 09/18/09 12:37:43 PMreport abuse
What about the folks who already own homes? Where's our free money? When did it become the gubaments' job to help you get in a house?
By anonymous @ 09/18/09 12:30:34 PMreport abuse
People getting tax credits can pay taxes
@Amy:

You seem to imply that people getting the 1st time homebuyer tax credit are a bunch of freeloaders that don't pay taxes. I'm filling out the paperwork for the tax credit, and I assure that I've paid many more times in taxes than $8000. Yes, a multiplier.
By Medical Student @ 09/18/09 11:40:34 AMreport abuse
Other's Who Have Lost
We lost our home to a serious preditory lender scam in 2004. At that time, there was no assistance for people like us. The preditory real estate agent, referred us to her prediatory loan officer, who worked for a preditory mortgage company. 3 days after our loan was signed we took it to a new mortgage officer, who we new though her dad who is an attorney. They couldn't believe how preditory written this loan was. We tried to go through all the normal channels to have someone somewhere do something for us.
By Ken & Barbie @ 09/18/09 11:37:19 AMreport abuse
Homebuyer Credit
I am so glad I purchased my first home in 07' after saving my hard earned money to come up with a downpayment. Now that my home has lost some value and I am essentially at zero equity, I get to see that others are now given by the gov't $8000 and possibly $15000 purchase a new home. I'm so proud to be an American. Lesson learned - don't be self-sufficient, just rely on the government for everything.
By Eric @ 09/18/09 11:36:23 AMreport abuse
Homebuyers Credit
My wife and I got the orignal homebuyers credit for $7500 but we have to pay every cent back within 15 years. I makes me upset that others got free money with I have to pay it back. I have no problem paying it back but i think the other people who got it should have to as well.
By Luke Pettit @ 09/18/09 11:24:21 AMreport abuse
homebuyer credit
You guys must not be building a house,maybe i'm looking in the wrong place but intrest rates are around 5.30 for us and we have credit scores of 813 and very little debt I'm sorry but yes I want 8,000 and yes i pay lots of taxes my house will prob not be finished by the end of November so extending it would be great for me 15,000 mmmmm the only way that would be good is if you could get it before closing 15,000 would lower your monthly payment,but i think 15,000 is overboard
By Joy @ 09/18/09 10:04:30 AMreport abuse
Housing credits
I own several houses, and even *I* don't want the credit extended. I'm very in favor of a security net in our society, probably at a far liberal end of the spectrum. I also think that open markets are good and that while this stimulus probably did help avoid a depression, we need to allow these markets to work out their problems gradually and naturally. That includes a decline in prices, if needed, and removal of government support. Housing should have this, energy should have this, and the auto industry should have this...oh, and the financial markets too, or do we think that we want to support that forever also?
By RL_ATL @ 09/18/09 09:00:38 AMreport abuse
No can do Scott
We can't use Social Security money to buy mortgage bonds. Why? Because The Social Security Administration pays retirees from the taxes it collects, and then whatever is left over Congress spends immediately to fund the federal government. The only thing left in the "vault" is an I.O.U. for future generations to pay.

A guy named Ponzi went to jail for pulling this kind of scam. With social security (LOL) and the criminals in Congress, it's just business as usual.
By Ed T @ 09/18/09 12:27:18 AMreport abuse
I hear the Twilight Zone theme...
Like a heroin junkie in need of "just one more" fix, the real estate weasels are working 24/7 to make this latest government subsidy essentially permanent. Does anyone here think this makes one damn bit of sense or is sustainable? It's like believing the tooth fairy will pay your bills.

This country is going down the tubes!
By Jason @ 09/17/09 06:38:13 PMreport abuse
Homebuyer Credit
Heck, if the government is going to back 90% of the loans made in the U.S., why not use social security as the means cash for buying mortgage bonds rather than all the capital flooding in from China. Considering that a large percentage of Americans have refinanced over the past year into a Fannie or Freddie loan and all of those loans were highly scrutinized, we now have a much more safe portfolio. If all loans henceforth were scrutinized the same way then the social security fund could stand to make a few bucks.
By Scott @ 09/17/09 05:48:12 PMreport abuse
No we should not keep giving tax credits to first time home buyers on the back of taxpayers. There should be enough incentive with the interest rates.
By Amy @ 09/17/09 05:44:49 PMreport abuse

And another thing!

Its my experience while shopping for a home, that the areas with the most foreclosures are not the low income areas that people want you to believe. No. the low income areas may have a lower home value. But its the so called "well to do" folks who have bitten off more than they could chew with their over priced homes and over extended credit lines, who are losing the shirt off their backs because its time to cash the checks they've been writing.

Two homes identical in every way that cost the exact same to build, but one is worth $80,000 and the other half a million? So the guy who has nearly half a million in "equity" immediately has all kinds of imaginary "credit" and "wealth". So when the market crashes and that imaginary line disappears....

its time to blame the poor folks.
This country is ridiculous.

By cyrus26 @ 09/23/09 11:30:20 PMreport abuse

Clark against housing credit?

During your rise in wealth over your lifetime Clark, I am sure you have benefited from some tax credits and kick-backs. So, I thing you may being a bit hypocritical to have a problem with everyone else benefiting from some type of credit for a change. I make $40,000 a year and give nearly $9,000 away in taxes that pay for wars, public assistance, over-payed politicians, credits for foreigners to start a life or business or school here, etc, etc.. SO WHY CANT I, FOR ONCE BENEFIT IN SOME WAY FOR MY FAMILY TO HAVE A LEG UP IN THIS WORLD? You give some good advice, but need to cut the Capitalist crap. It conflicts with your "helping Joe Everyman" theme.

By cyrus26 @ 09/23/09 11:08:30 PMreport abuse

$8,000 New Homebuyers Credit

Unless people have the strength to fight back, your mortgage broker may get all of that money in closing costs. My brother's closing costs amazingly had shot up from around $4,000 to over $12,000 which was pretty much the $8,000 credit money plus all the rest of his cash on hand with all the things they added along the way. The broker had the audacity to tell him not to worry about it since he'd be getting the new homebuyers credit - guess she thought it was hers to have the way they wrote the loan! In any case, he told them he'd walk away and found out the money that had been added along the way was mostly false fees since it went right back down to under 4,000 when he was putting the brakes on the deal. The real estate agent was even getting $1,000 tacked on in addition to her commission. I'm sure the people who thought up this credit didn't intend for your real estate agent and mortgage broker to get most or all that $8,000 but I'll bet you they are in many cases.

By Robert @ 09/21/09 10:33:28 AMreport abuse

Housing

Instead of building houses we should
tear them down and build factories.
We have too many homes and not enough jobs. Like "teach a man to fish".

By Tim @ 09/20/09 10:55:16 PMreport abuse

housing credit

I believe it is a good thing to give the more time. Yes it is supportive(sortta like the Clunker program), but it is going to get more houses off the market. Anyone who qualifies would be dumb not to take advantage of the low interest rates and gov. credit. If they have enough money for the downpayment many brokers can roll the closing costs into the loan and ,wahlah, new homeowner.
The government has always maintained that helping first time homebuyers makes good sense as it raises a person or family to middle class. It used to be thought that they were likely to work harder (and pay taxes) to keep their homes. It makes communities and housing values stronger and reduces the number of vacant houses. With the Government owning most of the mortgages through the above mentioned companies they are betting twice that the new homeowner will keep it going on their own. If they do, then the governments (Fed and Local) get more taxes... and the banks get more interest coming in...

I swear when i first saw an amortization chart, i thought they were joking. Mortgage rates, even when low, have to be the biggest money making deals ever inflicted on the consumer. Banks are getting rich off of the people who do pay and should not be crying about the ones they lured into crappy loans that defaulted.
This credit mainly helps the banks to write more loans, helps homeowners trying to sell, the real estate industry and mostly the first time homebuyer...it is at our expense, but if the builders stay too scared to keep pumping out new homes, this will help shrink the inventory of vacant homes, and in the long run, strengthen our communities and home values. Which in my book is worth the expense if it can heal the housing crisis.
P.S. I am a little mad and jealous that I can't get in on it.

By Dave @ 09/18/09 05:31:34 PMreport abuse

RE: Dumb Dumbs

Most of the trades you mentioned are mainly Illegal immigrants (at least here in Ga.) ..the home Builder and appliance maker won't spend the money on local business and the illegals wire most of their pay home.
As one person complained there has always been gov help for first time buyers, the $7500 was actually a loan (no interest)that has to be repaid..the big incentive was the $8000 Government grant that doesnt have to be repaid...this is to help out people like me who want the housing market to get back to normal levels of supply and demand....I wish they would have had the $8000 one two years ago when we were trying to sell our townhome, it was on a stale and degrading market for over a year. After we came down on the price a couple of times and still had no interest, we turned it into a rental until the market comes back.
We are heavily overdeveloped on residential and commercial properties in all the metro Atlanta counties...empty strip malls everywhere, Idiots think the same 5 mile stretch of road can support 20 nail salons, cleaners, sandwich shops and such...even larger shopping malls are empty because they build newer ones near them. The residential building slowed down so much, a good bit of our 200,000+ illegal workers went elsewhere due to lack of jobs. Us dumb dumbs got to find the silver lining in the situation.

By Dave @ 09/18/09 04:46:13 PMreport abuse

I'm with you, Clark. The government can't support everyone forever. And I agree wholeheartedly with those asking, "Where's mine?" We bought a home in December 2004, suffered a layoff and a reduction in hours in 2006/2007, and got behind on our mortgage. There's been no help and no tax credits for us. We could have been foreclosed on, but we worked our tails off (I had a full-time job and two part-time jobs for six months)and now we're current and back on track. We helped ourselves, and I'm getting tired helping those who won't. I also feel bad for those who can't get ahead or even catch up in this economy. Find a way to create JOBS, Mr. Obama, not more hand-outs!

By Elizabeth @ 09/18/09 01:11:15 PMreport abuse

dumb dumbs

this isn't about you or home buyers dumb dumbs. This is about employing home builders, construction workers, cabinet makers, appliance manufacturers, land scapers, etc.

When they have money to spend, they will spend it on your business and provide you with money who will then spend it on another business. (Of course, this will all be a wash after your taxes increase and hyper inflation hits...hahaha.

By Socialist Sam @ 09/18/09 12:42:30 PMreport abuse

IOUSA

Is the title to a movie that every single American should watch. Although some of the movie hints at liberal solutions to the problem, it, nonetheless, does a good job of explaining why our country is in seriously deep financial trouble. News flash: There is no SS trust fund. Nor is there a fund to provide Medicare benefits to the 6,000 per day who are reaching the age of 65. Where did the SS money go? Our politicians spent it on federal T bills (loans to the govt.) If a private fiduciary did this it would be a crime. If the level of ignorance of the general populace continues, we are f'ed. The government cannot afford even one more dime of spending. None.

By David @ 09/18/09 12:41:41 PMreport abuse

Extending Home Buyer Tax Credit

No, no, no. I have had it with this administration's freebie mentality. IF YOU CAN'T AFFORD IT, YOU CAN'T AFFORD IT. Simple as that.

By Beth @ 09/18/09 12:37:43 PMreport abuse

What about the folks who already own homes? Where's our free money? When did it become the gubaments' job to help you get in a house?

By anonymous @ 09/18/09 12:30:34 PMreport abuse

People getting tax credits can pay taxes

@Amy:

You seem to imply that people getting the 1st time homebuyer tax credit are a bunch of freeloaders that don't pay taxes. I'm filling out the paperwork for the tax credit, and I assure that I've paid many more times in taxes than $8000. Yes, a multiplier.

By Medical Student @ 09/18/09 11:40:34 AMreport abuse

Other's Who Have Lost

We lost our home to a serious preditory lender scam in 2004. At that time, there was no assistance for people like us. The preditory real estate agent, referred us to her prediatory loan officer, who worked for a preditory mortgage company. 3 days after our loan was signed we took it to a new mortgage officer, who we new though her dad who is an attorney. They couldn't believe how preditory written this loan was. We tried to go through all the normal channels to have someone somewhere do something for us.

By Ken & Barbie @ 09/18/09 11:37:19 AMreport abuse

Homebuyer Credit

I am so glad I purchased my first home in 07' after saving my hard earned money to come up with a downpayment. Now that my home has lost some value and I am essentially at zero equity, I get to see that others are now given by the gov't $8000 and possibly $15000 purchase a new home. I'm so proud to be an American. Lesson learned - don't be self-sufficient, just rely on the government for everything.

By Eric @ 09/18/09 11:36:23 AMreport abuse

Homebuyers Credit

My wife and I got the orignal homebuyers credit for $7500 but we have to pay every cent back within 15 years. I makes me upset that others got free money with I have to pay it back. I have no problem paying it back but i think the other people who got it should have to as well.

By Luke Pettit @ 09/18/09 11:24:21 AMreport abuse

homebuyer credit

You guys must not be building a house,maybe i'm looking in the wrong place but intrest rates are around 5.30 for us and we have credit scores of 813 and very little debt I'm sorry but yes I want 8,000 and yes i pay lots of taxes my house will prob not be finished by the end of November so extending it would be great for me 15,000 mmmmm the only way that would be good is if you could get it before closing 15,000 would lower your monthly payment,but i think 15,000 is overboard

By Joy @ 09/18/09 10:04:30 AMreport abuse

Housing credits

I own several houses, and even *I* don't want the credit extended. I'm very in favor of a security net in our society, probably at a far liberal end of the spectrum. I also think that open markets are good and that while this stimulus probably did help avoid a depression, we need to allow these markets to work out their problems gradually and naturally. That includes a decline in prices, if needed, and removal of government support. Housing should have this, energy should have this, and the auto industry should have this...oh, and the financial markets too, or do we think that we want to support that forever also?

By RL_ATL @ 09/18/09 09:00:38 AMreport abuse

No can do Scott

We can't use Social Security money to buy mortgage bonds. Why? Because The Social Security Administration pays retirees from the taxes it collects, and then whatever is left over Congress spends immediately to fund the federal government. The only thing left in the "vault" is an I.O.U. for future generations to pay.

A guy named Ponzi went to jail for pulling this kind of scam. With social security (LOL) and the criminals in Congress, it's just business as usual.

By Ed T @ 09/18/09 12:27:18 AMreport abuse

I hear the Twilight Zone theme...

Like a heroin junkie in need of "just one more" fix, the real estate weasels are working 24/7 to make this latest government subsidy essentially permanent. Does anyone here think this makes one damn bit of sense or is sustainable? It's like believing the tooth fairy will pay your bills.

This country is going down the tubes!

By Jason @ 09/17/09 06:38:13 PMreport abuse

Heck, if the government is going to back 90% of the loans made in the U.S., why not use social security as the means cash for buying mortgage bonds rather than all the capital flooding in from China. Considering that a large percentage of Americans have refinanced over the past year into a Fannie or Freddie loan and all of those loans were highly scrutinized, we now have a much more safe portfolio. If all loans henceforth were scrutinized the same way then the social security fund could stand to make a few bucks.

By Scott @ 09/17/09 05:48:12 PMreport abuse

No we should not keep giving tax credits to first time home buyers on the back of taxpayers. There should be enough incentive with the interest rates.

By Amy @ 09/17/09 05:44:49 PMreport abuse

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Sep 17, 2009 -- First-time homebuyer money to be extended or expanded?

What others are saying