The following is an excerpt of a CNBC article I ran across this morning. Here are a couple of questions to ponder.
1 – If investors get $7,000 for buying foreclosed properties, who pays the $7,000?
2 – If markets adjust based on supply and demand, what will happen when the government injects these artificial stimuli?
3 – What affect will this have on my personal real estate business?
Enjoy the excerpt!
The Senate on Thursday passed a bipartisan package of tax breaks and other steps designed to help businesses and homeowners weather the housing crisis.
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The measure passed by an impressive 84-12 vote, but even supporters of it acknowledge it’s tilted too much in favor of businesses like home builders and does little to help borrowers at risk of losing their homes.
The plan combines large tax breaks for homebuilders and a $7,000 tax credit for people who buy foreclosed properties, as well as $4 billion in grants for communities to buy and fix up abandoned homes.
Despite the impressive vote, the bill will be significantly redrawn by critics in the House who say it’s tilted toward businesses such as home builders instead of borrowers.
The White House opposes the plan but has not issued an explicit veto threat.
It says parts of the legislation would make the problem worse by depressing some home values and the measure inappropriately uses taxpayer money to bail out lenders saddled with foreclosed houses.
The House is likely to reject key portions of the Senate measure, including $25 billion over three years in tax breaks for money-losing businesses such as home builders.
A plan adopted Wednesday by a key House panel dropped that idea as well as the tax credit for purchasers of foreclosed homes.
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