Congress & the President Jockeying for the “Right” Housing Reform Package
Congress and the President are going round and round over the right mix of reforms to help the flagging housing market.
Nothing has officially been settled yet, but recent moves by Republican Congressmen to back Democrat-proposed legislature could get the President’s attention.
Reforms proposed by Congress include:
- $300 billion in FHA insured loans for financially-strapped homeowners
- A $7,500 credit for first-time homebuyers
- Overhauls of the FHA, Fannie Mae, and Freddie Mac
- Permission to state and local housing authorities to use tax-exempt bonds to finance distressed subprime mortgages
President Bush vehemently opposes legislation that would assist lenders and/or speculators, and would prefer to focus on homeowner assistance. Case in point, the President is expected to veto a $15B assistance program to be offered to the states hardest hit by foreclosures, saying it would benefit the very parties who are most to blame for the current sub-prime meltdown.
The issues of who to help, and how, is incredibly complicated. There are so many different parties to blame, from lenders and loan officers, to homebuyers, to Realtors, to the government itself for not stepping in earlier to avert today’s foreclosure crisis. The challenge is that, while there may have been SOME opportunistic loan officers, SOME homebuyers who bought more than they could afford, and some Realtors who may have knowingly failed to council said homebuyers, the bulk of the blame does not lie squarely on the shoulders of any of these groups.
With respect to Phoenix real estate and Scottsdale real estate, I can’t help but feel for the responsible homebuyers who purchased properties at the height of the market, responsibly, often with 20% down, who now have no chance of even breaking if they had to sell today. What do you do to help these buyers, who were victims of nothing more than bad timing?