President Bush addressed worries that the subprime mortgage meltdown could prompt a further wave of defaults and foreclosures. The released a proposal that doesn't offer a bailout for real-estate speculators but to reform the tax code for homeowners and bring better transparency to the mortgage market.
President Bush wants FHA to guarantee loans for borrowers who are at least 90 days behind on their mortgage payments. Meaning families who are struggling will be able to refinance their loans, meet their monthly payments, and keep their home.
It appears the government is willing to play a role, but it is limited. Being flexible through this difficult time with the lenders and a little help from the government is a great step.
Bush is also asking the administration to push legislation scrapping a required 3% down payment and boosting the size of loans to $417,000. Congress has not acted on this yet.
We have a housing problem and it's one that needs to be addressed. The economic fundamentals remain strong and analysts believe that there has been a so-called soft landing in the housing market. It's important to deal with this problem and for all of us to act responsibly.
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