The $700 Billion bailout became the $810 Billion bailout. So, what's $110 Billion between friends? Will banks resume lending? We can start the recovery right now, can't we?
Before that happens, home prices must stop falling. The excess inventory of REO homes must continue to cycle through. These actions would help consumer confidence and would send a signal to the banks that we have hit the bottom and it is safe to resume lending.
There are fewer home loan programs available for people that have a less than perfect scenario. We scour the loan market daily to find the few niches that still exist. Less loan programs mean that for the time being it will remain harder for people to qualify for the large inventory of homes that currently are choking the market.
Experts say that one in eight U.S. jobs depends on housing directly or indirectly. Whether it be Real Estate related, construction workers, loan officers and bank or broker employees. If we can get an upswing in home prices, that would boost the overall confidence and convince banks to lend again. Housing is what normally leads a stalled economy to a recovery.
Also, our country currently has an unemployment rate 6.1%. The number of unemployed people has risen to 9.5 Million. Economists predict that the unemployment number could rise as high as 7.5%, which would be the highest in 17 years. This is not a good sign. We need to have job growth because that translates into income growth which means people can spend more.
Here's one piece of good news; the bailout raises the federally insured deposit limit from $100,000 to $250,000. This should help out with the boost banks' reserves and help get things moving.