Here we go again…The Obama administration just can’t keep their hands off the troubled housing market.
The administration’s new push seeks to aggressively help borrowers who owe more on their mortgages than their properties are worth, offering financial incentives for the first time to lenders to cut the loan balances of such distressed homeowners. Those who are still current on their mortgages could get the chance to refinance on better terms into loans backed by the Federal Housing Administration.
The problem of “underwater” borrowers has bedeviled earlier administration efforts to address the mortgage crisis as home prices plunged. Officials said the new initiatives will take effect over the next six months and be funded out of $50 billion previously allocated for foreclosure relief in the emergency bailout program for the financial system.
It seems that this new program is similar to previous public policy and is really just a temporary fix. It’s unfortunate to say, but homeowners that can’t make their mortgage payment and owe substantially more than their home is worth, may just not be able to be saved. And it has to be asked about the fairness to those still making their payments but struggling every day to get by.
As I have mentioned many times before, I believe we need a more “hands off” approach to the real estate market. Although I did read an interesting idea in an article written by Bob Schwartz.
He says, “”The government should pass a bill that allows any home purchaser, owner-occupied or investor buyer, who buys a residential property within the next two years and holds that property for a minimum of three years (and a maximum of ten) to be free of federal capital gains taxes upon selling the property. The potential, tax-free profits on my idea would be a huge incentive for investors to jump back into the residential housing market. This increased demand would clear the built up housing inventory in a matter of months for most areas.”
Now that’s an idea that would help clear out the distressed property inventory and get our market back on track!
Posted In Real Estate
This entry was posted on Monday, April 26th, 2010 at 2:43 pm and is filed under Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.