That's why the program is set to be extended soon to cover the spring selling season. What's more, their proposal would also be expanded to allow higher-income Americans and some who already own homes to qualify for the tax break. Yippee more "free" money!!!
That's true even though the existing program has turned out to be exactly what you would expect from Uncle Sam: All smoke and dubious results.
In fact, according to estimates by Ted Gayer at the Brookings Institution, each additional home sale generated by the $8,000 first-time homebuyers' tax credit actually costs the government $43,000 for each additional sale.
It's madness I tell you.
Besides, according to Moody's this is one collapse that can't be stopped....
From Bloomberg by Jody Shenn entitled: Moody's May Downgrade Mortgage Bonds With New Outlook
"Moody's Investors Service said it's planning a review of U.S. home-loan securities that will likely lead to another round of rating changes based on a new view that property prices won't bottom until next year's third quarter.
The firm will boost its loss projections by "significant" amounts for prime-jumbo, Alt-A, option adjustable-rate and subprime mortgages backing bonds issued between 2005 and 2008, also after seeing higher losses per foreclosure than expected, Moody's said today in a statement. Recent data showing rising home prices doesn't prove the slump is over, the company said.
"The overhang of impending foreclosures and the continued rise in unemployment rates will impact home prices negatively in the coming months," New York-based Moody's said. Since the first quarter, the company has assumed in its mortgage-bond ratings that housing prices would bottom at the end of this year.
Ratings reductions typically boost the capital needs of bondholders such as banks and insurers and force some investors to sell debt. Moody's and Standard & Poor's, criticized by lawmakers for assigning top grades to mortgage debt proven too high by later defaults, have already cut ratings on hundreds of billions of dollars of notes in the $1.7 trillion market for so- called non-agency mortgage bonds, which lack government backing, lowering many securities multiple times."
Here's a bet home prices fall another 10%—-no matter how hard they try to prop them up.
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