The Housing Bill – A Panacea or False Hope

capital buildingOK, so President Bush signed what’s been commonly called the Housing Bill. It’s being touted as a panacea for our mortgage and housing market ills, but unfortunately comes nowhere near to being such. Again, I must restate from a previous post, The American Housing Rescue and Foreclosure Prevention Act, it should be called the Banker Bailout Bill. Forgive my cynicism, but numbers and figures are being touted and we, the taxpayers that are footing this bill, are going to be in for a major surprise in the long haul.

Before we go into that, I’ve read many articles and posts critical of the fact that First Time Homebuyers are being offered a tax credit as opposed to a tax deduction. The difference being that the credit will have to be paid back interest-free, mind you, over a 15 year period; while a deduction would basically just be a freebie. What I also think is good about this measure is that they, our leaders legislators, did not limit this to vacant homes as had been anticipated.

The fact that this loan has to be paid back is only fair because by doing otherwise you’re penalizing others who bought prior to this enactment or afterwards. Mind you this is only for first-time homebuyers, which includes those who haven’t owned a primary residence in 3 years, and the home has to have been bought between 4/9/08 and 7/1/09.

Anyway, will this stimulate the purchasing of homes? I think it will have little effect in that you still have to qualify for a loan with stiffer requirements and down payments.

One of the main concerns that I see with this bill is the Fannie Mae and Freddie Mac bailouts. Let me clarify, not the fact that they are being bailed out, but the basically unlimited funds that they are being given access to. All we’ve been hearing about is the estimated costs this bailout will be. But they are only talking in the short-term, there is no way to accurately estimate the costs over the long haul.

A good portion of this bill is aimed at those with at-risk mortgages at possibly having the ability to refinance at a fixed rate and that the new mortgage will be government backed by the FHA. Firstly, the lender has to be willing to go this route since it is totally voluntary. Some surely will in that they’d rather have their money than your property. But more than likely the mortgagee is not going to get such a great deal. Do you think that the lenders are going to go out of their way to give you, the borrower, a better deal? Seriously!

But on the other hand if they do go this route, it is most likely cheaper than going through a foreclosure. The other problem I see is that who’s to say that the borrower won’t go into foreclosure with the new mortgage. Again, more loses and costs to the taxpayers.

What really gets me is why is there a need for a federal database of personal data and fingerprints of anyone who basically has anything to do with the originating of a loan? Loan originators are licensed in Florida, where I’m located, and I gather most states in the union. This is just abhorrent in that it appears that the government wants more information on its citizens and they’re utilizing this fiasco to weasel their way to getting such.

To further the indignity, one part of the bill requires banks to report information on all debit and credit card transactions. Excuse me, but when did my spending habits become the government’s business? The more and more that I’ve learned about this bill, the more I kept on hearing George Orwell’s Big Brother in 1984 in my head. OK, so there are other things running around in my head as well – go figure!! I believe in rules and regulations, but this is just going too far.

Lastly, I want to leave you with this tidbit. It appears that a provision in the bill is to assist Chrysler (even though they aren’t mentioned directly) to benefit from a corporate tax incentive even though they are only a LLC, a partnership. Huh, and this has what to do with the topic? All I can say is good lobbyists and whoever else they have on the payroll or campaign donation list.

So what do you think? Is the Housing Bill a panacea, a fiasco or even somewhere in the middle?

See you next time at Marc’s Corner!

One Response to The Housing Bill – A Panacea or False Hope
  1. [...] Marc, a REALTOR® in Florida, offers his perspective: “It’s being touted as a panacea for our mortgage and housing market ills, but unfortunately comes nowhere near to being such. [...]

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