The Daily Bail

Editor's Note - Archive video & story originally published in October 2009.

Denise got an FHA loan to buy her home for $155,000. She took out a second loan (called a 203-K loan) to refurbish the place. The total loan amount is about $183,000. She says, “In total, I gave the bank $5,087 + $1,500 which were all deposit and closing costs.”

So her “down payment” was no more than 4% of the value of the home when she bought it. She will get all of that back and then some with the first-time home buyer tax credit.

Before she was old enough to legally drink alcohol, Denise Tejada bought a house in the San Francisco bay area, one of the most expensive real estate markets in the country. Her brother Wilmer bought his first house when he was 21 and he's investing in a second property soon.

And to make things worse, she is already underwater by $28,000 courtesy of a second loan for improvements to the property. There's no way of knowing how this will turn out, but it's safe to assume that subsidizing her purchase is not worth the theft from future generations.

Not to be outdone, we learned earlier today that a 4-year-old has qualified for the first-time homebuyers's tax credit, that the IRS is not asking for proof of purchase, and that the FHA is making 1/4 (twenty-five freaking percent) of all mortgage loans.

And don't forget that 3.5% down is standard for the FHA, so combined with the tax credit there are probably thousands of Denise Tejada's out there who are getting a house, an immediate 2nd loan, and then, instead of having to pay a down payment, are getting a few thousand CASH BACK from taxpayers for their trouble.

What could possibly go wrong.

Meanwhile the bubble re-inflates, just as Bernanke planned.