Janice Adekoya

LOS ANGELES - A federal grand jury has charged the former chairman and chief executive of KB Home with multiple counts of fraud and other crimes related to a stock option backdating scheme that authorities say bilked the homebuilder's shareholders out of millions of dollars.

The 20-count indictment returned Thursday charges Bruce E. Karatz with 15 counts of mail, wire and securities fraud, four counts of making false statements in reports filed with the Securities and Exchange Commission, and one count of lying to the company's accountants, according to the U.S. attorney for the Central District of California.

Karatz, 63, faces up to 415 years in prison if convicted on all charges.

"Mr. Karatz allegedly broke the rules, and then lied about it, to line his pockets and then to conceal his windfall from his company and the trading public," said United States Attorney Thomas P. O'Brien.

Karatz, who lives in the Bel Air Estates neighborhood of Los Angeles, agreed in September to pay $7.2 million to settle civil charges of backdating stock options.......

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According to an AP report today, major banks and government-controlled finance companies will place a moratorium on foreclosures until March 6 to give the Obama administration time to develop a plan for those struggling with foreclosure. Banks include JPMorgan Chase & Co., Morgan Stanley and Bank of America Corp, as well as government entities Fannie Mae and Freddie Mac.

The banks' pledges apply to owner-occupied homes, not those owned by investors

Fannie Mae said it was suspending all foreclosure sales and evictions for occupied properties, while Freddie Mac said its suspension would apply to properties with up to four units and noted that the ban would not apply to vacant properties.

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President Obama is expected to give a speech on Wednesday from Arizona, outlining the plan.

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Understanding the 2008 Housing & Recovery Act a.k.a. $7500 tax credit

1. The time is right to finally experience the American dream of home ownership. On July 30, 2008, President Bush signed a major housing bill (H.R. 3221) into law. As part of the housing bill, Congress has created a new, temporary tax credit to provide an incentive for first-time homebuyers. The temporary tax credit, combined with low interest rates, a large inventory of homes to choose from and home prices at or close to rock bottom prices, makes this an opportunity of a lifetime for first-time homebuyers.

But like so many of the good things in life, time is of the essence for buyers who want to take advantage of this outstanding opportunity. Only homes purchased on or after April 9, 2008 and before July 1, 2009 are eligible.

2. How does the tax credit work?
•Tax credits are special provisions that reduce income tax liability on a dollar for dollar basis. Credits are claimed on an individual's income tax return. In this case, Congress has created a tax credit for first-time homebuyers. The maximum credit amount is $7,500. Thus, if after figuring out all the income items and exemptions and making all the required additions, subtractions, deductions and other items on a tax return, a person had a total tax liability of $8,000, a $7,500 credit would wipe out all but $500 of the tax due.

3. So in the case of this new homebuyer tax credit, what happens if the purchaser is eligible for a $7,500 credit but their entire income tax liability for the year is less than $7,500?

This new tax credit is a so-called "refundable" credit. Thus, if the actual tax liability was $6,000, the purchaser would receive a tax credit refund of $1,500. The refundable amount is the difference between the $7,500 credit amount and the amount of tax liability. (The term "tax liability" refers to the actual amount of tax computed on the tax return once all the computations are complete. The individual may already have "paid" their tax liability through withholding, by means of estimated tax payments or simply by a check that makes up the difference when there is a shortfall of withholdings or estimated tax payments. Most taxpayers determine their tax liability by referring to tables that the IRS prepares each year.)

See the updated plans for your money in my other blog entries: http://activerain.com/blogsview/931245/More-money-for-the-Tax-Credit-for-homebuyers-8000-NOW

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Well according to The Wallstreet Journal the latest version of the stimulus bill says that: The $15,000 homebuyer tax credit didn't survive the final negotiations on the stimulus bill. Instead, Congress slightly increased to $8,000 an existing $7,500 credit for first-time homebuyers and eliminated repayment provisions.Congressional negotiators said that $8,000 number isn't yet finalized.

The new credit is retroactive to Dec. 31, 2008, which means that anyone who buys a house this year, through August, won't have to repay it. First time buyers who used the credit in 2008 still have to pay it back over a 15-year period.

Alot of people may feel more at ease since the new provision says that you do not have to pay the money back (whew!). In this market what is there to loose as a new homebuyer? Nothing in my opinion.

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