Housing Stimulus- NAR Plan For Stimulating the Housing Market
December 8th, 2008 Categories: Housing Stimulus, Real Estate News
Charlotte NC A stimulus for housing seems almost a certainty for the next Congress after the new President is sworn in January 20. A number of plans are being put forth my various constituent groups- Over the next few weeks I’ll outline the concepts with comments. This is from our own NAR, a major Washington player. The plan outline comes from the NAR press release.
NARs 4 Point Housing Stimulus Plan
The National Association of REALTORS® created its Housing Stimulus Plan to urge Congress to include provisions to the recent economic stimulus bill that will help stabilize the nations housing markets. The plan includes four points that focus on buyer incentives:
1. Remove the requirement in the current law that first-time home buyers repay the $7,500 tax credit, and expand the tax credit to apply not only to first-time buyers but also to all buyers of a primary residence.
There is nothing like a tax credit (read Tax Payment) to a home buyer. The semi-credit passed in June legislation had too many “fine print” details- especially the one stating it was just an interest free loan, and not a credit. It’s gone nowhere. However, real tax credits WORK to make people get the credit (buy a house).
2. Revise the FHA, Fannie Mae, and Freddie Mac 2008 stimulus loan limit increases to make them permanent. The Economic Stabilization Act, enacted in February, made loan limit increases temporary, and subsequent legislation reduced the loan limits and made them permanent. This has broad implication for home buyers in high-cost areas.
This is huge. Fannie and Freddie are the keys to 50% of the mortgage market… and FHA is the major low down payment (3%) lender of choice and accounts for as much as another 25-30% of the market… keeping the limits higher means more loans are qualifying and conforming- the market for non-conforming Jumbo loans is still on life support. These limits revise downward January 1, 2009 without changes…could it be apart of the auto-bailout?
3. Urge the government to use a portion of the allotted $700 billion that was provided to purchase mortgage-backed securities from banks to provide price stabilization for housing. The Treasury department should be required to use the newly enacted Troubled Assets Relief Program to push banks to:
• Extend credit down to Main Street, making credit more available to consumers and small businesses
This is the idea of the Fed buying down interest rates, making homes more affordable
• Expedite the process for short sales
• Expedite the resolution of banks real estate owned (REOs) properties
This is not my area of expertise, perhaps a mortgage pro might weigh in. A thought on short sales- do not get your hopes too high here unless its a small amount with one lender. These hae a VERY low succes rat, very HIGH frustration rate as banks take months to respond hoping for a better offer.
A few principles perhaps: It seems that the money DOES need to get to the homeowners who can still afford a reasonable mortgage- the bailout needs to keep more people in their homes (not just bankers and their well-fed hedge fund investors) And- unless and until the underlying asset is repaired, the Wall Street implosions will continue as they uncover more and more bad assets. The relief needs to be targeted at owner-occupied dwellings, investors invested at their own risk.
4. Make permanent the prohibition against banks entering real estate brokerage and management, further protecting consumers and the economy.
This is the NAR position in the morning, in the evening and the night, as NAR is constantly on guard against the Banking Industry lobbying efforts to bring “Branch Real Estate” to the branch bank. Banks would dearly love to begin employing real estate agents next week- and they’ve engaged powerful lobbyists and friends to help achieve this goal. NAR thinks banks should stick to banking, and I agree enthusiastically. Maybe the banks could get into the stock market… oh wait, they tried that.
So what do you think? Which parts make the most sense? I’ll post the National Association of Home Builders plan tomorrow.tm
————————————————————
Charlotte Homes For Sale About Charlotte NC Charlotte Luxury Homes For Sale
Charlotte Buyer Agents work only for you. 704-351-1519
; ?>/images/MatoChiclet.gif)
I think the NAR proposal is a good one. However, while NAR encouraged a reduce of interest rates to 4.5% (looks like this will happen), they don’t think this rate should be offered for refinances. I disagree. I think that in order to help as many homeowners in trouble with higher interest rates, this rate should be available to them also.
I agree. I think in the final bill there will be a refi provision, with so many BAD and foreclosing mortgages out there it can’t just apply to NEW mortgages… but NAR would look at it more narrowly of course.
Finally someone who can write a good blog ! I loved your post and will be telling others about it. Subscribing to your RSS feed now. Thanks