Stimulus and foreclosures
February 9, 2009 · Print This Page
The current economic crisis is the result of problems in the nation’s housing markets. Efforts to boost the overall economy will be wholly ineffective if the Economic Stimulus bill that goes to the President does not include provisions focused on stabilizing real estate markets.
Provisions hoped for in the final bill would include:
A $15,000 home buyer tax credit that was proposed by Senators Isakson, Lieberman and Dodd.
The Lieberman/Isakson Amendment was included in the senate version of the Economic Stimulus Bill by a unanimous voice vote. This amendment would provide a Tax Credit to all home buyers at the rate of 10% of the sales price up to a limit of $15,000. The credit would be available for a one year period to all purchasers of primary residences.
Permanent FHA, Fannie Mae and Freddie Mac loan limits that match the levels enacted in 2008.
FHA should insure single-family home mortgages up to $271,050 in low cost areas and up to a maximum of $625,500 in high cost areas permanently.
Increased resources for foreclosure mitigation efforts to stem the flood of foreclosures.
Not in the stimulus package but under consideration by the Obama administration are two proposals which deal with toxic mortgages. One is to rope off the toxic mortgages from those that are performing and sell them to private investors. The other is to create a “bad bank” which would function like the FDIC takeover of Indy Mac. These proposals each work in different ways toward a negotiated solution for homeowners real estate problems. The selling of these assets to private investors, along with guarantees, is said to be the Obama Administration’s favored remedy.
The senate expects to debate Amendment 353, a proposal by Senator John Ensign (R-NV) that would provide 30 year fixed financing at a rate of about 4%, for anyone purchasing a primary residence.
Insider familiar with the final bill are saying that while the conference report remains to be finalized, it appears as though the recovery bill will include an $8,000 tax credit for first-time home buyers. Current law only provides a $7,500 incentive, which must be paid back.
The Sacramento region would gain from these proposals. While nothing is an immediate fix communities like Roseville, Granite Bay, Folsom, Fair Oaks, East Sacramento, The Fab Forties, Land Park and Granite Bay. would benefit. Why? These communities are less impacted and stand to gain from loan modification and short sales.
Solutions for 2009 and Beyond:
I will provide homeowners a complimentary book entitled, “Foreclosure Solutions- A Homeowners Handbook. Alternatives, Solutions, & Education.”
Topics in the book include:
- Do’s and Dont’s, Basic Advice you need to know.
- Keeping Your Home, Six Strategies to Save Your Home.
- Foreclosure Avoidance, Four Strategies to Avoid Foreclosure.
- Consequences of Foreclosure.
- Deficiencies per IRS.
- Using Services of a Pro
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