Tax cheats were given $1.4 billion in government-backed mortgage
loans under President Obama’s economic stimulus, and the government
doled out at least an additional $27 million in tax credits to
delinquents who took the first-time-homebuyer tax break, according to a
government audit released Tuesday.
Under government rules,
delinquent taxpayers are supposed to be ineligible for the mortgage
insurance program unless they have reached a repayment agreement with
the Internal Revenue Service. But the Federal Housing Administration didn’t have the right controls to weed out bad applications, said the Government Accountability Office, Congress‘ chief investigative arm.
That meant FHA
insured $1.4 billion in mortgages for 6,327 borrowers who collectively
owed $77.6 million in unpaid taxes, or an average of more than $12,000
each.
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