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Tuesday, May 19, 2009

Relief

Housing industry people like real estate agents want to see the $8,000 first time home owner credit extended to all home purchases. The idea is simply to stimulate interest and business, and by extension the economy since housing is at the economy's center.

The problem is this. If the $8,000 is being used to finance the house buy then are we setting up a repeat scenario of the present housing crisis. Are people relying on the credit to come up with the cash when otherwise they might not have the resources to make the buy. Sound familiar?

McClatchy: Pressure grows to stimulate housing alongside foreclosure relief
The Obama administration last week updated the Making Home Affordable program it rolled out Feb. 18. One key component involves allowing Fannie Mae and Freddie Mac to refinance mortgages that have loan-to-value ratios as high as 105 percent.

That means a homeowner can owe up to 5 percent more than his or her home is worth — a condition called being "underwater" on a mortgage — and still qualify for refinancing. Fannie and Freddie used to allow refinancing only up to 80 percent of a home's value. This component of Making Home Affordable seeks to reach as many as 5 million at-risk borrowers.

3 comments:

Glynn Kalara said...

House prices need to return to sane levels. I'm sorry if people spent to much I really am. However, that's a risk we all take whenever we buy anything. With homes the only one's that take a bath though are the speculators that were flipping house and the people forced to sell because they lose jobs etc. That the banks , mortgage companies, RE brokers were dishonest in their sales appraoches is without a doubt. You still don't have to buy, nobody was putting gun to these people's heads. It was not like Health Ins. where u have no real option to buy or be ruined if your caught without it. or your cable bill because you have no other option but them. Etc. Buying a home was not shopping @ wal-mart and to many people didn't understand what they were signing onto and they should have.

Jim Sande said...

A lot of the focus is out in Vegas. They really went nuts out there. I have a close relative and they tell me all about it as they worked in real estate in Vegas.

Vegas is underwater ground zero. Take Vegas out of the equation and the foreclosure and underwater map looks many percentages better.

Around where I live, I don't know of anyone underwater. There have been foreclosures probably more than usual but not that many more, not like thousands upon thousands. The market has been slow but its surprisingly perky lately.

Glynn Kalara said...

Actually, it's no surprise that Wall st. and the Vegas strip kind of merged in this whole fiasco.