On the surface, the Housing and Economic Recovery Act of 2008 seems like it has a little something for everyone. On closer inspection however, the bill appears to have ultimately been the victim of congressional partisanship and compromises that run counter to original intentions. For instance, the $7,500 tax credit for first time homebuyers sounded like a great way to motivate buyers back into the market until you discover the credit must be paid back over the next fifteen years. An overhaul to the FHA 203B loan program seemed appropriate until you learn that many of the changes, such as increasing the down payment requirement and the elimination of down payment assistance programs is likely to exclude many would-be FHA borrowers from owning a home. Even the FHA "rescue refinance" that allows borrowers to refinance their adjustable rate mortgages to fixed rates despite owing more than the property is worth sounded great until you learn that the borrower is liable for the difference as well as any subordinated secondary financing providing little incentive for the borrower to keep making his or her payments. The one bright spot to the Act is the greater oversight of lenders and loan officers that will result from its implementation. Hopefully, the creation of Nationwide Licensing and Registry system will help screen out the unscrupulous lenders who helped create this mess. So despite its promises, the recently passed housing act offers more rhetoric than practical solutions to the housing crisis. Let's hope that Congress will revisit the issue and work together to create legislation that will offer some real relief.
Comments(0)