1) the loan limits on mortgages will be raised to $727,000 in high cost areas
2) the tax credit will be raised to $8,000 with NO payback....this is huge!
3) interest rates shoud react favorably to the package(see below)
4) the bill has over $50 billion in it for foreclosure mitigation, with Treasury Secretary Geithner's Treasury plan signaling that the second half of TARP and TALF will be used to mitigate foreclosures through a government guarantee, drive down interest rates by buying another $200-300 billion of mortgage paper from the GSES's thereby freeing them up to do the same with new mortgages. Additionally Fannie Mae has just agreed to lift the cap of 4 investment properties eligible for loans and raise it to 10. Talk to your CPA for the full details on this.
Mortgage interest deductability, real estate tax deductability, and the $250,000/$500,000 cap gains exclusion (an overall package worth more than $100 billion and for some a very attractive funding source for their pet projects) has remained intact.
The "big and bold" stimulus package will really impact the real estate market as long as the banks can follow through on the lending side.
Keep in mind that modifying mortgages is not an easy exercise due to all the different parties involved. Many times mortgages were sold by the originating entity to Wall Street. From that point they were repackaged and put into "tranches" or pools, based on the perceived stability or ability to pay back the mortgage. This has created many stakeholders which in turn have to agree to modify the mortgage.
More to come.
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