Is the Mortgage Bubble Popping?

With all the recent news about mortgage foreclosures and the possible end to easy credit, I hope you will join me today at noon ET for a chat with author and director James D. Scurlock. As the featured author for the March Color of Money Book Club selection, he will answer questions or take comments about his movie and book, "Maxed Out: Hard Times, Easy Credit and the Era of Predatory Lenders."

If you can't join me live for the chat, submit your questions early or check out the transcript.

It's interesting to read all the Monday morning quarterbacking going on about who's at fault for the rise in foreclosures. For example, is it the Federal Reserve's fault?

Some members of the Senate Banking Committee seem to think so. They're blaming the Fed's failure to regulate risky lending practices as exotic mortgages given to buyers with checkered credit helped drive up housing prices across the country. ("Fed Faulted For Inaction On Mortgages," The Washington Post, March 23)

Now the Fed may be considering lending restrictions ("Fed Cautiously Considers Writing Rules on Lending," The Washington Post, March 28).

Or perhaps we should blame consumers, who were all too complicit in their consumption of credit. "The date of the last ceremonial burning of an American mortgage is lost in the mists of time," wrote James Grant in a Washington Post op-ed, "Borrowers, Beware" (Mar. 18). "Outright, unencumbered ownership of a house, a building or a corporation is no longer an ideal that most Americans embrace. The new goal is to borrow as much as possible, as soon as possible, against any asset that could be financed. And these days -- thanks to Wall Street's ingenuity --all manner of assets pass as good collateral for a loan," he wrote.

Or better yet, let's hold lenders responsible. One reader did in her letter to the editor -- "Beware the Credit Vortex" (Mar. 17). Jan T. McCarthy of Great Falls, Va., wrote in part, "I think they (credit card companies) are wolves in sheeps' clothing whose interest is their bottom line and whose tactics are often unethical and predatory. I believe that they target potential bad debt -- the young and the inexperienced, low-income borrowers, and slow and late-paying debtors."

Personally, I think it's all of the above.

After the Bust

In the wake of the subprime lending meltdown, Washington Post reporter Dina ElBoghdady discusses the options left for people still trying to get a house. What is like for the average house hunter?

It won't be easy especially if you've got some credit challenges, as she reports in "From Here to Home" (Mar. 25) and in "Poor Credit Clouds Hopes For a Bargain" (Mar. 25).

In times like these, renting may very well be your best option. For tips on renting, read "First Time Renting? What to Know" (Mar. 17).

Tax Time

If by now you've prepared your tax return and you realize you have to pay but don't panic. As I said in a recent column ("If You Can't Pay Taxes, Not Filing Is the Worst Option"), don't let the lack of funds keep you from filing.

Filing will at least knock off one penalty. The total penalty for failure to file and pay can be 47.5 percent (22.5 percent for late filing, 25 percent for late payment) of the tax owed. Filing would save you the 22.5 percent portion of the penalty.

Most importantly be suspicious of companies promising you they can get the IRS to take pennies on the dollars you owe. These claims are wildly exaggerated. Typically, they are touting that they can get you an "offer in compromise or an OIC, which are very hard to get. An OIC allows the IRS to accept reduced payment. Last year, the IRS received 59,000 requests for offers in compromise but only 15,000 were granted.

Your best bet is to ask for an installment agreement from the IRS.

Ever Been Audited?

Some taxpayers got the chance to show the IRS what it's like to be audited. In three forums held across the country, the agency got to hear how we taxpayers feel about their serves -- "Forum Lets Taxpayers Turn Tables on IRS" (Associated Press, Mar. 23).

One woman complained about the long wait on the telephone to get an answer to a simple question. Another taxpayer wondered why everyone can't submit their returns online for free (I wonder too.) Nina E. Olson, the national taxpayer advocate, says she's been trying to get Congress to press the IRS to develop the software that would allow everyone to file online for free.

Olson reports to Congress about IRS practices. To learn more about her role, visit the Taxpayer Advocacy Panel Web site, or check out this page on the IRS Web site -- Taxpayer Advocate Service.

To get more tax information, check out The Post's Tax Time Resources.

You are welcome to e-mail comments and questions to singletarym@washpost.com. They may be used in a future column or newsletter with the writer's name unless otherwise requested.