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Friday
Feb182011

More Homebuyer Tax Credit Madness: 20 Year Old Uses FHA Loan To Buy With No Money Down And Gets Cash Back For Her Trouble

Editor's Note - Archive video & story originally published in October 2009.

From PBS Marketplace

  • Denise got an FHA loan to buy her home for $155,000. She took out a second loan (called a 203-K loan) to refurbish the place. The total loan amount is about $183,000. She says, “In total, I gave the bank $5,087 + $1,500 which were all deposit and closing costs.”
  • So her “down payment” was no more than 4% of the value of the home when she bought it. She will get all of that back and then some with the first-time home buyer tax credit.

Before she was old enough to legally drink alcohol, Denise Tejada bought a house in the San Francisco bay area, one of the most expensive real estate markets in the country.  Her brother Wilmer bought his first house when he was 21 and he's investing in a second property soon.

And to make things worse, she is already underwater by $28,000 courtesy of a second loan for improvements to the property.  There's no way of knowing how this will turn out, but it's safe to assume that subsidizing her purchase is not worth the theft from future generations.

Not to be outdone, we learned earlier today that a 4-year-old has qualified for the first-time homebuyers's tax credit, that the IRS is not asking for proof of purchase, and that the FHA is making 1/4 (twenty-five freaking percent) of all mortgage loans. 

And don't forget that 3.5% down is standard for the FHA, so combined with the tax credit there are probably thousands of Denise Tejada's out there who are getting a house, an immediate 2nd loan, and then, instead of having to pay a down payment, are getting a few thousand CASH BACK from taxpayers for their trouble.

What could possibly go wrong.

Meanwhile the bubble re-inflates, just as Bernanke planned.

 

 

 

 

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Reader Comments (38)

This is happening all throughout my local area. The one hiccup for the FED in their attempts to reinflate the bubble is that prices continue to slide, and these 3.5% downpayment FHA loans are typically underwater within a month or two of the close. Within 6 months many will begin to default, I'm already hearing about delinquencies. How many 20 year olds like Denise will give a second thought to foreclosure when they are significantly underwater and have put very little skin in the game. Very few. Instead of reinflating the bubble the FED and FHA are setting us up for another leg down, this will happen when FHA goes under like Fannie and Freddie did. It is so frustrating to see it happen all over again, its like watching a rerun of Veronica's Closet, it was terrible the first time and almost makes me sick to see it again. We need to end the FED! They got us in this mess, and are setting us up once again.
Oct 23, 2009 at 6:28 PM | Unregistered Commenter2Planker
FALL OF THE REPUBLIC ON YOUTUBE.......

This one is perfect for you DB, watch at least the first of fourteen parts. I know it isn't being said by the chick from Democracy Now but it should find a nice home here.
Oct 23, 2009 at 6:51 PM | Unregistered Commentergobias
As for this post, keep ignoring the power grab in the health industry. I know, you will say it is not about the bailouts, yadda yadda yadda. It is all about the money and the power, it is all connected.

Vanilla Sky...

"What is the answer to 99 out of 100 questions? Money."
David, look,I don't wanna worry you.
I'm holding them off,but we got a situation here.
The bylaws of the boardprotect your 51% vote...
only if you're mentally acute.
I'm sorry that poor girl died...
but you've handed the board a real gift with your mishap.
They'd like to declare you incapacitated.
But you're back.
You sound good to me,so let's fight the fuckers...
and have a full recovery.
Oct 23, 2009 at 7:04 PM | Unregistered Commentergobias
Rent is horribly expensive. 20 year olds like Denise are figuring out how to live free for years at a time. A nice house for no money down. Cash out for a big screen TV. And if she's a single mom, it could takes years of rent-free living before a bank can foreclose and evict her. And what does a 20-year old worry about a temporary black mark on her non-existent credit history? We're in the beginning of a 20-year recession. It's not like there's a lot of future opportunity to be missed.
Oct 24, 2009 at 11:15 AM | Unregistered CommenterJohn S
@Gobias who wrote:

"I know it isn't being said by the chick from Democracy Now but it should find a nice home here."

Gobi...you need to stop viewing this site through a traditional right-left lens...i don't judge the source of videos...if the content is good we will source from anywhere...you should read anything into that kind of thing...i barely even know amy goodman's name....it was the Nomi Prins speech that you should be noticing, not that it came from Democracy Now.
Oct 24, 2009 at 11:31 AM | Registered CommenterDailyBail
This is happening all throughout my local area. The one hiccup for the FED in their attempts to reinflate the bubble is that prices continue to slide, and these 3.5% downpayment FHA loans are typically underwater within a month or two of the close. Within 6 months many will begin to default, I'm already hearing about delinquencies. How many 20 year olds like Denise will give a second thought to foreclosure when they are significantly underwater and have put very little skin in the game. Very few. Instead of reinflating the bubble the FED and FHA are setting us up for another leg down, this will happen when FHA goes under like Fannie and Freddie did. It is so frustrating to see it happen all over again, its like watching a rerun of Veronica's Closet, it was terrible the first time and almost makes me sick to see it again. We need to end the FED! They got us in this mess, and are setting us up once again.

Nice post 2planker...

The FHA is out of control...they are the problem...
Oct 24, 2009 at 11:32 AM | Registered CommenterDailyBail
Well said JohnS...repeated for emphasis...

"Rent is horribly expensive. 20 year olds like Denise are figuring out how to live free for years at a time. A nice house for no money down. Cash out for a big screen TV. And if she's a single mom, it could takes years of rent-free living before a bank can foreclose and evict her. And what does a 20-year old worry about a temporary black mark on her non-existent credit history? We're in the beginning of a 20-year recession. It's not like there's a lot of future opportunity to be missed."
Oct 24, 2009 at 11:33 AM | Registered CommenterDailyBail
Hey Shamu, did your dad ever talk to you about the advantages of dieting?
Oct 24, 2009 at 3:10 PM | Unregistered CommenterWhereRTheyNow?
Dailybail says...Gobi...you need to stop viewing this site through a traditional right-left lens...i don't judge the source of videos...if the content is good we will source from anywhere...

Prove it...
Oct 24, 2009 at 5:36 PM | Unregistered Commentergobias
Start with something very important...How the Press Pool Busted the White House Boycott of Fox!
Oct 24, 2009 at 5:37 PM | Unregistered Commentergobias
Post This...

http://www.youtube.com/watch?v=5mQ6n74IGeg&videos=HqiEEpWL5CE&playnext=3&playnext_from=TL
It is a video of the Fox News response...only fair.

Obama Thug Tactic..."Let's run it up the flagpole and see if anyone salutes it".

Go ahead, claim that this has nothing to do with your site. I get it but what could be more important to protect.

Should the guy who is running the entire economy have an enemies list? Should he ban Fox's point of view?

I dare you, post it. Obama is dangerous and needs to be called out on this and other things.

I have posted this before but it needs to be posted again...

To sit back hoping that someday, some way, someone will make things right is to go on feeding the crocodile, hoping he will eat you last - but eat you he will. Ronald Reagan
Oct 24, 2009 at 5:48 PM | Unregistered Commentergobias
gobias,

For the 147th time, this site isn't about Fox News or Jake Crapper or you name it. It's about the bailouts and fiscal ruin. All of what you say about the flagpole might be true, but daring DB to post your link makes no sense. There's almost nothing on here about the wars, for instance. Nor the Patriot Act. If DB chooses not to cover it -- that's his call. But this "I dare you" stuff is ridiculous. Can't you find enough anti-Obama stuff -- relevant to this site? I'd say you've got plenty to keep you busy before you start layiing down dares. I don't get it.
Oct 24, 2009 at 6:39 PM | Unregistered CommenterJames H
Yes, I dare you because it is not Jonathan Stuart Leibowitz, Coldbert Report, Democrazy Now, The Huffington Roast, Associated Depressed, Dullitico, George Stepalloverus, Sadderday Night Live, CNN, Katie Couric, PBS, CNBC, MSNBC, ABC, and the rest of the reliable looney left.

Don’t worry James, your dailydose of leftist medicine is here to stay.
Oct 24, 2009 at 8:03 PM | Unregistered Commentergobias
Did I miss any?
Oct 24, 2009 at 8:05 PM | Unregistered Commentergobias
Wamu TRUTH...

READ THESE COURT DOCUMENTS!

JPMorgan admits that the FDIC took over a solvent bank in one of the latest court documents...

I'm enclosing a few more documents filed through the BK court in regards to a declaration of Thomas M. Blake (http://www.crai.com/ProfessionalStaff/listingdetails.aspx?id=1276 ).

The declaration can be found in 103-4.pdf at http://www.mediafire.com/?sharekey=3b830df9f3d0e6fce7c82ed4b8f0c380aff12395630f22f3ce018c8114394287

http://wamuequity.org
http://wamuqd.com
http://www.wamu-shareholders-resources.com/wamued.html
http://www.wamucoup.com
http://wamustory.com
Oct 24, 2009 at 9:24 PM | Unregistered CommenterKyle Krol
Um...I thought owning a home meant you had NO mortgage? Oh, well.....I will go back to acting stupid again. Dumb azz appraiser....I need to figure out why I can't make up these silly numbers that these "buyers" are wanting to pay.
Oct 25, 2009 at 1:31 AM | Unregistered CommenterAin't Bullshittin'
"To sit back hoping that someday, some way, someone will make things right is to go on feeding the crocodile, hoping he will eat you last - but eat you he will. Ronald Reagan"


And feed the crocodile Reagan did. The Iran-Contra Affair was a clandestine action not approved of by the United States Congress. It began in 1985, when President Ronald Reagan's administration supplied weapons to Iran¹ — a sworn enemy — in hopes of securing the release of American hostages held in Lebanon by Hezbollah terrorists loyal to the Ayatollah Khomeini, Iran's leader.

The U.S. took millions of dollars from the weapons sale and routed them and guns to the right-wing "Contra" guerrillas in Nicaragua.

The Reagan administration sold avionics kits to upgrade China's F-8 fighter as well as improved submarine torpedoes and artillery shells.

He sold F-15 aircraft to replace losses from the Saudi force of 60
Upgraded electronics and avionics for existing Saudi F-15s; modernization of Saudi M-60A1tanks
Ammunition support vehicles for Saudi artillery. As well as AWACS

Israel was not happy...

The Reagan administration offered Saddam Hussein financial credits that eventually made Iraq the third-largest recipient of US assistance. It normalized diplomatic relations and, most significantly, began providing Iraq with battlefield intelligence. Iraq used this information to target Iranian troops with chemical weapons. And when Iraq turned its chemical weapons on the Kurds in 1988, killing 5,000 in the town of Halabja, the Reagan administration sought to obscure responsibility by falsely suggesting Iran was also responsible.

Reagan chose Rumsfeld as his emissary to Hussein, whom he visited in December 1983 and March 1984. Rumsfeld never mentioned this blatant violation of international law to Hussein, instead focusing on shared hostility toward Iran and an oil pipeline through Jordan.

All in the name of higher profits for campaign contributors... Both parties are responsible for all...
Oct 25, 2009 at 12:17 PM | Unregistered CommenterS. Gompers
Lets not forget funding and training the Afghan "freedom fighters" (Taliban)

http://www.hartford-hwp.com/archives/45/278.html
Oct 25, 2009 at 12:26 PM | Unregistered CommenterS. Gompers
I supported Reagan and his efforts in what was later labeled the Iran-Contra Affair (Scandal) by the left. I really like Oliver North,a true American hero. It has been quite a long time since we made heroes like him, now we get people like Colin Powell. Your version of the event is skewed but I understand your point of view so I get it. I am surprised that you didn’t mention Clinton when you talked about China, okay, I am not surprised.

Wow, my favorite quote of all time is by Rumsfeld.

“There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don't know. But there are also unknown unknowns. There are things we don't know we don't know.”

Don’t confuse Rumsfeld with the Bush Administration. Rumsfeld did not support nation building. Rumsfeld is a historian and old school, I liked his approach. He knew that the left have a strange innocence to their beliefs. He knew that talk is cheap, unlike Obama. In a speech in 2006, Rumsfeld said the following…

“We need to consider the following questions, I would submit:

• With the growing lethality and the increasing availability of weapons, can we truly afford to believe that somehow, some way, vicious extremists can be appeased?
• Can folks really continue to think that free countries can negotiate a separate peace with terrorists?
• Can we afford the luxury of pretending that the threats today are simply law enforcement problems, like robbing a bank or stealing a car; rather than threats of a fundamentally different nature requiring fundamentally different approaches?
• And can we really afford to return to the destructive view that America, not the enemy, but America, is the source of the world’s troubles?

These are central questions of our time, and we must face them and face them honestly.”

Thank you for reminding me of Oliver North and Donald Rumsfeld. It is a trip down memory lane that these days we all could benefit from.
Oct 25, 2009 at 3:39 PM | Unregistered Commentergobias
Clinton never made the quote, though he was firmly in the lap of China as well... And you don't see me quote Clinton, so you don't get it.

I liked Oliver North as well, he was a good soldier who followed orders... No Colonel has the authority to operate a "shadow government" as he was charged. he took the fall for others, and dealing with Iran with their support of Hezbollah after the death of 299 U.S. servicemen in a cowardly attack in Lebanon is ridiculous. Lebanon should have been leveled after that.

And as to Rummy, perhaps we should stop training, equipping, and providing aid to nations and organizations who will always accept our stuff, but will never change their views of us.

My point was, that yesterdays heroes are today's villians, brought to you live by past policies of the U.S. government to prop up dictators, and wheel and deal with terrorists, in the name of business.

Your trip down trip down memory lane leads me to 9-11, if we had not trained, equipped and funded the enemy in the 1980's, do you think they could have accomplished that. Even back then, they hated us infidels, therefore could not be truly trusted by us.

There is a method to the "madness". And my version of the event is not skewed, there is no innocence in my beliefs, I already told you, you are way left of me...
Oct 25, 2009 at 4:56 PM | Unregistered CommenterS. Gompers
gobias,

Too bad Rummy, like Barry, is a complete MORON. Otherwise they would have gotten the right answers to those questions^, and we wouldn't still be following the same dumbass policies in the middle east.
Oct 25, 2009 at 5:01 PM | Unregistered CommenterJames H
"I supported Reagan and his efforts in what was later labeled the Iran-Contra Affair "

What role did you play?
Oct 25, 2009 at 5:10 PM | Unregistered CommenterS. Gompers
I think that it helped get rid of Carter, that is enough right there.
Oct 25, 2009 at 5:18 PM | Unregistered Commentergobias
And we will change the names on the checks again, and still things will remain the same...
Oct 25, 2009 at 5:23 PM | Unregistered CommenterS. Gompers
Oct 25, 2009 at 5:33 PM | Unregistered Commentergobias
@Gobias...you're completely off point again...nomi prins was talking about the bailouts and goldman...you complained about Democracy Now being the source and i said the source didn't mattter if the content was good...so then you bring up something unrelated to the issues we cover...pure politics...

Is this an example of your critical thinking...get on-topic if you expect me to post it...
Oct 25, 2009 at 9:55 PM | Registered CommenterDailyBail
Again, I give you more credit than that. You know my point is more than valid.
Oct 25, 2009 at 9:59 PM | Unregistered Commentergobias
"I think that it helped get rid of Carter, that is enough right there. "

Carter was already gone when Reagan started playing with Iran, now your perspective is skewed.

Nice song, but I prefer 70's metal. And I am happy.
Oct 26, 2009 at 6:28 AM | Unregistered CommenterS. Gompers
"Rent is horribly expensive. 20 year olds like Denise are figuring out how to live free for years at a time. A nice house for no money down. Cash out for a big screen TV. And if she's a single mom, it could take years of rent-free living before a bank can foreclose and evict her. And what does a 20-year old worry about a temporary black mark on her non-existent credit history? We're in the beginning of a 20-year recession. It's not like there's a lot of future opportunity to be missed."

How absolutely true my friend, and well said.

The beauty of this is how we bail out her lifestyle. Her mortgage gets bundled into a CDO, stamped AAA, sold to the world for a profit and Wall Street makes a killing too. The rich get richer, the poor get emtitlements ALL on the backs of the working middle class.

The job destruction you are seeing in America is the weight of that last straw on the middle class back. Once we're all separated into the exploited poor and the rich exploiters, it won't make a hill of beans anyway.

"--no matter how you slice the inverted fantasy world of John Maynard Keynes and his behaviorist followers, it always comes out in little pieces of reality. For example, you can dice dehydrated shit into cute little squares, but it still stinks up the kitchen. Unrepayable debt obligations will never magically turn into assets any moreso than little turd squares will turn into truffles, and spending your way out of debt still makes about as much sense as stinking your way out of shit."
Oct 26, 2009 at 3:22 PM | Unregistered CommenterWil Martindale
"--no matter how you slice the inverted fantasy world of John Maynard Keynes and his behaviorist followers, it always comes out in little pieces of reality. For example, you can dice dehydrated shit into cute little squares, but it still stinks up the kitchen. Unrepayable debt obligations will never magically turn into assets any moreso than little turd squares will turn into truffles, and spending your way out of debt still makes about as much sense as stinking your way out of shit."

Wil, who wrote this?
Oct 27, 2009 at 12:30 AM | Registered CommenterDailyBail
Gobias.

I agree that Obama looks like an idiot by singling out Fox News...but how is that a story for this site...and i've posted content from Fox, Napolitano, Alex Jones, Ron Paul...and more...for the hundredth time, my politics can not be put neatly in a box...you know the story...not all of us wish to turn iran into a parking lot...there might be another way...
Oct 27, 2009 at 12:37 AM | Registered CommenterDailyBail
"Um...I thought owning a home meant you had NO mortgage? Oh, well.....I will go back to acting stupid again. Dumb azz appraiser....I need to figure out why I can't make up these silly numbers that these "buyers" are wanting to pay. "


Good point AB, unfortunately, even no mortgage still means you pay rent the rest of your life.

When you record your real estate in the county, you are recording your turn to use the property in the corporation records. If you don't pay your usage (rental) fees (property taxes) they will take their property back via a tax sale, and sell the privilege to someone else. The value of the property is irrelevant. They are just concerned with the rent (tax) due. Your property has been usurped by the government. The same with zoning laws. If you want to build a garage on your property, you can do so only after you get permission via a building permit (another tax). If you don't get permission, they will make you tear it down.
Oct 27, 2009 at 7:23 AM | Unregistered CommenterS. Gompers
U.S. Senate Document No. 43, 73rd Congress, 1st Session (1934), to wit:

The ultimate ownership of all property is in the State; individual so-called "ownership" is only by virtue of Government, i.e., law, amounting to mere "user" and use must be in acceptance with law and subordinate to the necessities of the State." Remember, it's not a question of "if" the economy will collapse, but "when." And if they can't "steal" your property with the above described scheme, they will take it via sequestration by "conservation easements" and expropriate it to international organizations, corporations and associations at "the extinction of the State" through "concessional" lending. That is what the ESA (Endangered Species Act of 1973), the UNEP (United Nations Environment Programme), UNDP (United Nations Development Programme), and the treaty entitled the "Convention On Biological Diversity" and the benign sounding phrase, "Sustainable Development" are all about. And this includes Governor Locke's Washington Wild Salmonid Restoration plans.

The "plan" is to control all resources, human and natural. The control is not by elected public officials, but by a self-appointed oligarchy. This is born out by reading the details of Article 21 and 39 of the "Convention On Biological Diversity." This treaty declares there are no reservation of rights. Article 21 mandates that three international organizations, the UNEP, UNDP and the World Bank, will direct and control "the policy, strategy, programme priorities and eligibility criteria relating to access to and utilization of resources" in each member country.

Under the Uruguay Round Trade Agreements signed into law by the 103rd Congress, which are amendments of the GATT treaty (General Agreement On Trade And Tariffs), the WTO (World Trade Organization) was created. These agreements dictate policy and contain clauses that allow various other international organizations to regulate and control the member Nations' resources and production. One of these organizations is IUCN (International Union For Conservation Of Nature) which is responsible for implementing the international policy and plans and agendas on a national, regional and local level.
Oct 27, 2009 at 7:30 AM | Unregistered CommenterS. Gompers
I noticed this video was from 2009. I would love to see the follow-up video that follows her through the foreclosure process.
Feb 18, 2011 at 3:07 PM | Unregistered CommenterThe Permabear
I do hope everybody pays attention to my last two posts above, and remember Agenda 21 as well.
Feb 18, 2011 at 7:47 PM | Unregistered CommenterS. Gompers

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