Obama housing stimulus, is it really going to work?

By
Real Estate Agent with Realty Professionals, Inc.

Do you really think his proposal or I guess I should say law, will really work?  What about the people that have lived responsibly?  They live within their means, they make their mortgage payments, they are investing for their retirement, they are even paying their taxes.  The only thing I have seen out of these stimulus packages is they will get a $400 tax credit for a person filing single and a $800 tax credit for filing jointly.

Now they (the administration) have been trying to get the message out that if they can stop the foreclosures on your street that the value of your home will not decline.  The way I see it, this whole mess has already effected the real estate industry and believe for the most part the worst is already here. 

Yes, it's not all the current administration fault for being in this situation but it is their fault for telling the responsible Americans that we have to pay the bill for the ones that didn't act responsible.  If our tax dollars are going to benefit anyone, it should benefit EVERYONE! 

I am truly sorry for the ones that are losing their homes due to foreclosures.  I wish they never got into that situation.  If we used responsible loan practices of earlier days, we wouldn't have these issues to deal with.  I also really find it hard that they claim they didn't know this was going to happen.  I think what they are really saying is, I had no clue the market was going to go down along with my interest rate going up and I now I can't sell my house and make the profit I was relying on.  That is speculating and now I as many other responsible Americans have to pay for their speculations and that is not right or fair.  What happened to what my mom taught me, you are responsible for your actions?

Now, the current administration wants to put all the blame on President Bush for these loan practices but it has been reported that President Clinton implemented the loan practices of FannieMae and FreddieMac, not President Bush.  Yes, President Bush probably should have done something sooner but he does not deserve all the blame that the current administration is blaming him for.

Do you have any suggestions on how this needs to play out?  If you could bend President Obama's ear, what do you want him to know or suggest on how to deal with this.  Is there a way out to help ALL Americans.

 

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Ambassador
1,960,730
Fernando Herboso - Broker for Maxus Realty Group
Maxus Realty Group - Broker 301-246-0001 - Gaithersburg, MD
301-246-0001 Serving Maryland, DC and Northern VA

I would tell him to allow homeowners that QUALIFY and finding themselves in a serious hardship. .to short sale their own homes.

 

Feb 20, 2009 01:10 AM #1
Rainer
207,498
Shane OnullGorman
Eau Claire Realty, Inc. - Eau Claire, WI
Eau Claire Wisconsin, Real Estate Agent & Realtor- Buy or Sell

I dont see how anyone can make the judgement that just because some people are defaulting that they are living beyond their means or being irresponsible. Have you seen the unemployment numbers? Why do you think so many people cant pay their mortgages. Its not because they dont want to or just wont its because they cant and its really unfair to portray it in this manner.

Feb 20, 2009 01:14 AM #2
Rainmaker
292,304
Home Loan Search.Online
Home Loan Search Online - Newnan, GA

I'm reserving judgment on the effect of this proposal. The last time they came up with a housing solution it was the Hope For Homeowners Program that was designed to help 400,000 families. It turns out that the government spent millions for this program, only to have less than 1% of 400,000 actually qualify and us the program!

Feb 20, 2009 01:20 AM #3
Rainer
68,515
Matt & Riahna Kastner
St. Louis Real Estate Society - Saint Louis, MO
Multi-family Real Estate Brokers - St. Louis City

It might help in the short-term, but as usual, it is just a band-aid tactic. We will not alter the underliing problem, which is that Americans don'tsave anymore. We are a nation of credit based consumers. And its the government that is breeding this into us. Rather than leave people to their own devices or even encourage savings, they are encouraging mroe recless spending with incentives to buy a car or home. And those tax rebate checks, they want to you spend that.

It's time to face the fact that our country has become a socialist euro-wannabe. What ever happened to capitalism? I bet Milton Friedman is rolling over in his grave.

Feb 20, 2009 02:11 AM #4
Rainer
32,986
Larry DeGroat
Realty Professionals, Inc. - Searcy, AR
ABR, CRS, e-PRO, GRI in Searcy

Shane, thanks for your comments.  As I stated, I am truly sorry for their situations and I really am.  What we see mostly on the news is the loan products were interest only and adjustable rate mortgages.  I have not done an adjustable rate mortgage here in my market in a very long time.  They were usually done or at least promoted to allow the buyer to get into a house because of qualifying with the lower interest rate.  That tells me that under normal circumstances, they were not living within their means.  There are people that really are put in a bad spot due to the economic crisis but that is not why we are where we are at. 

I have helped people workout of these kinds of situations.  I tried doing a short sale a few months ago with a homeowner.  They went through a divorce and neither one could afford to keep the house.  To start with, they hadan 80/20 loan.  That is where they get a normal mortgage for the 80% and a non conforming loan for the 20%.  They were already over their heads on what the house was worth.  They did this deal as a fsbo also.  Anyway, I was able to put it on the market and it never sold.  I did get authorization to do a short sale.  I had a first and second mortgage company to deal with and that wasn't easy.  This was happening when the first bailout was being talked about last year.  I basically got put in a hold position.  I felt that we were put on hold because the lender would get bailout money if it passed to do workouts.  To make a long story short, we had a buyer and the lenders would not work with us and the sellers ended up letting it go back through foreclosure.  The house is now under contract as a foreclosure and he listed price is about $10,000 less than what our offer was during the short sale.  I don't know what it sold for yet or if there were any concessions.  I feel the bailout didn't help in this situation, if anything, it hindered it.  These are the kinds of things we shouldn't support.

 

Feb 20, 2009 03:33 AM #5
Rainmaker
1,043,831
Barbara S. Duncan
RE/MAX Advantage - Searcy, AR
GRI, e-PRO, Executive Broker, Searcy AR

Hello, Larry.  I believe you are a Fox News watcher but we're still friends.

Feb 20, 2009 12:51 PM #6
Rainer
84,839
Mary PAUL, ABR, CRS,GRI, e-PRO,
RE/MAX Advantage Realtors, Searcy, AR - Searcy, AR

Larry,

I think the stiumulus package will fail.  Here is my opinion, maybe not worth much.  I think the banks should reduce the mortgage to the rate that the homebuyer started with.  Most of the problem is with the ARM"S.  This would reduce the mortgage payment for many Americans.  I don't think we should reinvent wellfare, Clinton had nearly abolished it, and now President Obama is reinstating it.  Everything eventually returns to normal, and I don't think you should rush it by bail outs.

Feb 21, 2009 05:19 AM #7
Rainer
32,986
Larry DeGroat
Realty Professionals, Inc. - Searcy, AR
ABR, CRS, e-PRO, GRI in Searcy

Thanks Barbara and Mary for your comments!

Feb 23, 2009 12:11 AM #8
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Larry DeGroat

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