Bailout

Housing Tax Credit Fraud Extension

By Anonymous

James Hagerty at the WSJ has the story: Tax Credit Extension Could Help Tax Cheaters. Hagerty discusses comments from two real estate agents: Glenn Kelman, chief executive of Redfin Corp. who noted that some customers who signed contracts after April 30th were pushing to close by June 30th. Kelman suspects fraud. And Schahrzad Berkland, an agent for Fidelity Pacific Real Estate in San Diego who noticed that pending sales for April have continued to rise ... something that is very odd. (Note to FBI: more fraud for you guys!)

I noted yesterday: "I'm sure some people will commit fraud and backdate documents."

Extending the closing date will encourage even more fraud. All the mortgage lenders have been giving priority to purchase applications over refinance applications, and 60 days is more than enough time.

If short sales are a problem, then make the extension very narrow - a 30 day extension for short sales, with the servicer processing the short sale certifying that it was 1) a short sale and 2) that they were in possession of a signed contract by April 30th (with a significant penalty for a false statement).

Otherwise this extension should be titled the "Housing Tax Credit Fraud Extension Amendment". Geesh ...

Full post as published by Calculated Risk on June 11, 2010 (boomark / email).