What an Obama Administration Means to Your Mortgage
The
debates are done, the election is over, and on January 20, 2009, Barack Obama
will be inaugurated as President of the
United States
. No matter where you fall in the political spectrum, no one knows for sure
exactly what this will mean to the future of our country. With this in mind,
let's put all politics aside, and take a closer look at Obama's plan for our
future. And since a home is still the biggest, most important investment you'll
ever make, we'll focus the limited space of this short article on Obama's basic
housing measures.
More Economic Stimulus – Since
trouble in the economy won't wait until January 20th, plans for another economic
stimulus package are already in the works, so we might even see this happen, in
one form or another, before Obama takes office.
Obama has also discussed a housing stimulus as well, to stem the tide of
foreclosures, including a temporary 90–day freeze on foreclosures, as well as
measures to address the demand side of the housing issue. This package includes
$25 billion in state fiscal relief, which Mortgage Law Central says will help
avoid "painful property tax increases."
Obama also wants to "aggressively and comprehensively" implement the
recently–passed rescue plan and the Hope for Homeowners Act. This means the
Treasury, HUD, Fannie Mae and Freddie Mac, and all of the banks and loan
servicers who benefit from the rescue bill will continue to coordinate broad
mortgage restructurings and loan modifications for struggling homeowners. No one
knows for sure exactly how this will be implemented or what it even looks like
yet, but we'll keep you updated as the details are released.
Reformed Bankruptcy Laws – Obama
has promised to repeal the 2005 bankruptcy bill. A controversial measure, this
will allow judges to alter mortgage terms during a bankruptcy, providing more
protection for struggling homeowners.
New Mortgage Interest Tax Credit
– Obama is expected to create a 10% universal mortgage interest credit for
those who don't currently itemize. This means about $500 in savings for 10
million American homeowners.
Protection Against Mortgage Fraud and
Predatory Lending – During the campaign, Obama blamed the financial
crisis on lax government regulations, so look for tougher regulations, new
criminal penalties for mortgage fraud violators, more funding for enforcement
programs, more detailed loan disclosure laws, new counseling programs and other
consumer protections, including a new Home Obligation Made Explicit (HOME) score
(kind of like a new APR calculation) to help borrowers better understand and
compare mortgage costs during the mortgage process.
This will go a long way in protecting new home buyers from the opportunists that
have given good mortgage professionals like us a bad name in the last few years.
And since so much of our business depends on referrals from satisfied clients,
the good news is a lot of these people are now out of business. We hope that any
new measures introduced by the Obama administration will help keep a new breed
of copycats from invading our industry as the real estate market begins to
change for the better in 2009 and beyond. From now until the end of the year,
you can expect volatility to continue in the financial and credit markets. This
means mortgage rates, too, so if you or anyone you know is looking to buy or
refinance a home, give us a call. We monitor the performance of
mortgage–backed securities on a daily basis, which allows our clients to
capitalize on changes that will help lock in the best rate for their individual
goals and needs. Also, if you'd like to discuss any of these or other changes
that could affect your mortgage, don't hesitate to give me a call.
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