|
October 2009 - Posts
-
Due to a timing issue ACUMA Submitted the following to Chairman Matz on October 22. What is your opinion?
Members are encouraged to discuss and debate this issue here on the ACUMA COmmunity Blog...
Thanks...
Bob.
October 22, 2009 The Honorable Debbie Matz, ChairmanNational Credit Union Administration1775 Duke Street
Alexandria, VA 22314-3428 RE: ACUMA Comment: Extending the $8,000 First-Time Homebuyer Tax Credit Dear Mrs. Matz: The American Credit Union Mortgage Association (ACUMA) brings together the shared real estate lending and financing interests of nearly 8,000 credit unions and credit union service organizations (CUSOs). ACUMA assists credit unions with their goals of expanding homeownership and extending access to affordable housing to their 90 million members around the country. We very much appreciate the Government’s efforts on behalf of homeowners over the course of the past year and urge the President and Congress to extend and expand the $8,000 First-Time Homebuyer Tax Credit program. The Internal Revenue Service (IRS) recently reported that well over 1 million taxpayers have benefited from the tax credit, many of these credit union members. We are experiencing this positive impact at a local level on a daily basis. While the tax credit program has enabled more of our members to realize the American dream of homeownership, it has also helped to improve the overall housing market. We feel homeownership is one of the foundations of economic stability. This emphasizes the need to ensure we do not upset a fragile housing market just as we begin to see signs of stabilization. Many small businesses rely on the housing market and are starting to experience positive gains as the housing market recovers. ACUMA supports the Mortgage Bankers Association’s (MBA) position that supports tax initiatives that would encourage home purchase activity. ACUMA further supports the following MBA recommendations pertaining to changes to the current tax credit:
- Expand eligibility to ALL homebuyers – While the tax credit has proven to be effective in helping first-time homebuyers, a large number of Americans are thinking about moving from their current home for various reasons and might be incented by a tax credit to do it now, when the economy needs it the most.
- Increase the tax credit to a maximum of $15,000 – Increase the tax credit up to 10 percent of the home purchase price up to a maximum of $15,000. The credit may include a phase-out based upon adjusted gross income as reported on a borrower’s most recent tax returns.
- Require the tax credit to be repaid in certain instances – The borrower should repay the tax credit only if the residence is sold within the first three years (exception for employment-related moves) or in the event of a taxpayer default on any other mortgage that existed at the date the tax credit is claimed. This would discourage “buy and bail” behavior, where a borrower uses the tax credit for his or her advantage and walks away from an existing mortgage obligation.
Tax credit should be available for settlement – If practical, facilitate the Internal Revenue Service (IRS) sending funds claimed by the taxpayer directly to the settlement agent of the property transaction for a down payment.
- Enhancements effective immediately – Any enhancements to the programs should be effective on the date of enactment and should be in effect for at least 12 months to ensure the greatest economic stimulus.
One addition to the MBA recommendations would be to consider we recognize the cost of buying one’s first home varies widely based on location. The tax credit currently calls for it to be applied based on a nationwide salary cap. We would recommend the administration consider varying the salary cap based on the Median Statistical Area’s average home price. ACUMA believes that the First-Time Homebuyer Tax Credit has had a significant positive impact on our economy, and we support extending and expanding it so more of our 90 million members nationwide may experience the joys of homeownership. As we approach the end date of the current program, we urge Congress to consider the MBA’s recommendations to expand the program to include all homebuyers, increase the credit up to $15,000, make funds available for closing, and extend the overall program by at least 12 months. Problems in the housing market helped to lead the nation into recession. Stimulating the housing market will have an immediate impact on consumers and small businesses and help to sustain a positive recovery for our nation. Respectfully submitted, John Reed John Reed, Chairman Bob Dorsa, President
|
|
|
|