Remarkably, the Post editorial writers seem to be the only ones who have noticed that the Senate "Foreclosure Prevention" bill will give banks an incentive to carry through foreclosures. The bill would give a $7,000 tax credit to buyers of foreclosed properties. While there could be some rationale to having a credit like this for homes that had already been foreclosed and been allowed to deteriorate, it makes no sense to allow the credit to apply to homes where the process has not yet been completed. This effectively gives banks an incentive to carry through the foreclosure instead of trying to work out new terms with the homeowner. Give the Post credit for catching this one, almost no one else did.
--Dean Baker
