The House is set to vote today on the housing bill that would offer relief in a twofold approach. The first goal of the bill would be to offer, through the FHA, fixed rate and affordable loans to those who are at risk of loosing their property to foreclosure. While this would require lenders to accept a loss, it would also provide an alternative to the appartenly inevitable and seemingly endless wave of foreclosures that have rocked the lending world in the past year.
The bill would include approximately $15 billion in housing-related tax breaks.
The second portion of the bill would focus on shoring up the floundering institutions of Fannie Mae and Freddie Mac. It would do this via a line of credit from the National Treasury for the purpose of backing Freddie Mac/Fannie Mae while tightening regulations on those institutions.
What does this mean for the public?
It certainly spells relief for some at-risk borrowers and may help stem the flood of foreclosures, though it does not seem anyone has yet to accurately guess just how deep the vein of defaulting loans is going to run. The refinancing flurry that would be sure to follow would be a benefit to lenders and title companies, and the reduction of inventory through foreclosure/short-sale prevention may help reduce the overall stagnant supply on the market at this time. The bill would would also help assuage some fears regarding Freddie and Fannie, though at what tax payer cost remains to be seen.
At the end of the day, the bill will not "fix" our current economic challenges in a snap, but may stabilize the situation a bit as we weather the storm and look forward to better times! Whatever the case, the truth of the matter is we are still in tough times for many sellers, but excellent times for buyers!
Happy house hunting!
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Gail,
I agree that this bill will not fix anything, and it should not be passed. If it is sent to the President it should be vetoed. A bailout never solved anything.
Steve