Tax credit extension invitation for fraud?
The home buyer tax credit experiment looks more like a complete disaster with each passing day.
Instead of helping get the real estate market back on its feet, it has done the complete opposite. The credit pulled forth demand, creating an artificially hectic spring market amid a still tenuous economy, only to set the stage for another slump amid the plunge in sales that followed the credit's expiration on April 30th.
But maybe most galling has been the hasty extension of the June 30th closing deadline for home buyers seeking to claim the credit.
Basically, to qualify for the $8,000 credit you had to have a home under agreement by April 30th and then to have closed by June 30th.
After furious lobbying, the National Association of Realtors prodded Congress into passing a three month extension of the June 30th closing deadline, arguing hundreds of thousands of home buyers simply hadn't completed their paperwork.
But the fact is, three months is a very long time, too long in fact. You could easily go out and buy a home and close on it in two to three months - the sales process is cumbersome, but it does not take that long to close.
But it could provide quite a tempting target for anyone looking for a quick and easy score.
With all that time to work with, don't be surprised if we see all sorts of backdated home purchases as buyers seek to claim a credit they don't qualify for.
And of course, that's not counting the outright fraudsters who will just make it all up.
In fact, the home buyer tax credit has already established itself as a prime target.
My favorite in the government stupidity department: $9.1 million doled out to prison inmates, including 241 serving life sentences.
