Sen. Coburn, Citing GAO Report, Slams Mortgage Insurance For ‘Tax Cheats’

Posted by Orb Staff on June 28, 2012 No Comments
Categories : Residential Mortgage

11888_217px-tom_coburn_official_portrait_112th_congress Sen. Coburn, Citing GAO Report, Slams Mortgage Insurance For 'Tax Cheats' Sen. Tom Coburn, R-Okla., is criticizing the federal government for allowing ‘tax cheats’ to receive federal mortgage insurance assistance, even though government regulations prevent the extension of mortgage help to individuals with tax debt.

Coburn, citing a recent report from the Government Accountability Office (GAO), has expressed outrage that thousands of home buyers with "significant tax debt" received one-time mortgage help under the American Recovery and Reinvestment Act (ARRA).

According to the GAO report, at least 6,327 tax delinquents, owing nearly a total of $78 million in federal tax debt, received more than $1.44 billion in Federal Housing Administration (FHA) mortgage insurance for loans issued under the ARRA; more than half of these individuals also received a total of $27.4 million first-time home buyer tax credits.

Coburn notes that the GAO report concluded these individuals were two to three times more likely to default on their home loans.

‘In the name of 'stimulus,' the federal government gave mortgage insurance to thousands of people who were tax cheats and had a bad track record paying their debts,’ says Coburn. ‘No one would handle their own money that way. Yet, the federal government needlessly put taxpayers on the line to help tax cheats buy homes. Congress needs to ensure that tax cheats are no longer allowed to take advantage of FHA programs.’

The GAO report was compiled at the request of Coburn and Sens. Carl Levin, D-Mich., Max Baucus, D-Mont., Orrin Hatch, R-Utah, and Charles Grassley, R-Iowa.

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