$275 Billion Home Stimulus Plan At First Blush
I know the reports are preliminary, but I am already getting ulcers over President Obama’s cure for our housing woes. Here’s my first report card:
A -$8000 tax credit for first-time buyers, l like very much. Assuming this will work like a section 179 deduction and come right off the taxes, not add 5 more pages or 6 hours of CPA billable hours to the tax return, essentially using tax dollars to help fund the home purchase.
F- Revamping U.S. bankruptcy rules, giving judges the power to reduce mortgage payments and set lower interest rates. Excuse me, but I think part of our problem was that banks got too big, unregulated and complex. So now we are going to let judges play banker? This will slow down lending and banks will have to recoup their losses from somewhere —charge more to the customers who pay their bills, or higher PMI or PMI for everyone or higher interest rates.
Not fair, folks.
C – The government will match reductions lenders make to keep borrowers home payments at 31% of their income. What income — stated income? Does that include alimony?
Incomplete – Flushing Fannie Mae and Freddie Mac with $900 billion.
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It is so hard to get your arms around the mortgage mess and how to fix it. The foreclosure and short sale process is becoming a nightmare for anyone trying to buy one and agents trying to make the transactions happen. People just have to realize that they aren’t dealing with a banker any more – they’re dealing with the government. Thousands of homes are becoming lot rotting cheese in a warehouse.
Candy — as to your objection to giving federal bankruptcy judges jurisdiction and discretion to reform loan terms, they used to have the ability to coax lenders and borrowers and it worked well. They were stripped of that right in the “Reform” act of 2005.
Drop the bankers’ talking points. Do some research.
Well said, finally a good report on this stuff