I'm not sure how I missed the big announcement from NAR about these two bills. Let's see - every time they want me to support some hunk-of-pork stimulus bill or additional spending bill, I always get the email encouraging me to contact my legislator to get it passed.
But here are two bills by Assembly member Ken Calvert, the long-time sponsor of the Banks Out of Real Estate Bill, and I hear nada? H.R. 1245 brings the $15,000 buyers tax credit back to the table. You might recall this was on the table at one point of the stimulus debate only to be canned in favor of the $8,000 first-timer-only bone we ended up with.
Then, instead of raising capitol gains, Ken has introduced a bill H.R. 755, that would eliminate capitol gains on up to two investment properties. You may recall that NAR sent a 'strongly worded statement' to congress about Obama's wish to mess with capitol gains. Considering our recent success rate, I suspect Congressmen are quaking in their loafers about NAR's response.
Hmmmmm, let's see - on
the one hand we
could have more taxes,
no stimulus to
housing, at least in our part of the country, along with a disincentive for lenders to
lend and for investors to buy
OR
we could defeat the cram-down,
incentivize home buyers
across the board, new homes, first time homes, move-up
homes, in every market, and encourage
investors to mop up some of that inventory. That's a tough choice, eh? Guess
which side's gonna win? Yeah, I think you're probably right.
Of course that's just my opinion. I could be wrong.
I’m sure that many of you have read about the various plans to help people whose homes are in or near foreclosure. I wholeheartedly support finding ways to help homeowners stay in their homes, and have hosted several local housing workshops to do just that, but I have significant concerns about plans that would provide benefits to delinquent mortgage borrowers at the expense of responsible home buyers in the future.
This week, the House will vote on H.R. 1106, also known as the “cram down” bill. The bill authorizes bankruptcy judges to “cram down” the principal of home mortgages which would make the housing situation worse by increasing the risk to lenders who issue loans. The result of the legislation would make it harder and more costly for people to buy, sell and refinance homes, as lenders will inevitably raise lending rates to account for their increased exposure to risk. At a time when our housing market needs stability, the “cram down” bill does exactly the opposite. While 3 million borrowers are 60 days or more delinquent on their mortgages, 52 million borrowers remain current in their payments. The Wall Street Journal Editorial, “Call Them Irresponsible,”
(03/03/09) provides excellent analysis of the cram down legislation and potential negative impacts.
Rather than forcing a costly fix with an uncertain outcome, I support proven methods of increasing demand in the housing market. That is why I introduced H.R. 1245, which would provide a $15,000 tax credit for buying a home. I have also introduced H.R. 755, which would eliminate the capital gains taxes on up to two investment houses purchased over the next three years. As Robert Samuelson wrote in the March 2, 2009 edition of The Washington Post,
“Somehow, we need to cut bloated inventories (13 months of supply for unsold new homes), curb falling prices and stimulate new construction. The hope is that once buying improves, it would feed on itself. People would join from the sidelines. [A $15,000 tax credit] would create 250,000 jobs and cost $40 billion -- big money, but tiny compared with the hundreds of billions lavished on recovery programs.”
Where a reasonable loan modification can occur, every effort should be made by both the lender and the homeowner. However, we must not irrevocably change our banking and loan system for the benefit of a few and at the expense of the many.
I am sincerely hoping that the nimble hands of NAR are hovering in the background of this legislation and that we are ready to mobilize on his behalf. It would be nice to have a 'Realtor win' that's of benefit to Realtors and homeowners alike. Oh, and that we realize we won without being told.
Just my $.02.
If you agree with Ken (or if you don't), you can let him know by clicking right here: http://calvert.house.gov/ContactInformation.asp
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