Thousands of Tax Cheats Got Federal Mortgage Assistance or Tax Credits

WASHINGTON, D.C. – June 27, 2012 – (RealEstateRama) — A new report from the Government Accountability Office (GAO) found that thousands of home-buyers with significant tax debt were given one-time mortgage help under the American Recovery and Reinvestment Act (ARRA), despite federal rules that make tax cheats ineligible for federal mortgage insurance. The report found that “many individuals with tax debt take advantage of government programs, such as federal loan insurance, thereby reaping benefits from these programs while failing to pay their own taxes.” The report also found tax cheats that took advantage of the program were two-to-three times more likely to default on home loans, posing a much higher risk for the program. The report was done at the request of Senators Tom Coburn, M.D. (R-OK), Carl Levin (D-MI), Max Baucus (D-MT), Orrin Hatch (R-UT) and Charles Grassley (R-IA).