I am not a politician, and I usually get a headache when I read articles about what congress is doing or the law-making process in general. Having said that, we are hearing so much in the media about the Government’s plans to assist in the housing crisis, I thought I should at least post something about what is happening.
The main focus at this point has been for the Government to provide funding allowing for homeowners to refinance out of variable rate mortgages that have already or that are set to adjust higher. Another provision compensates for the decrease in home values relative to the property appraisal. The article below gives a little more information on what is happening.
I don’t think what is happening in the Government directly affects what investors should be doing to acquire property. Your focus as an investor remains the same – find deals, evaluate the numbers, and make lots of offers. That is how you are going to be successful in this business. Now get to work.
U.S. House Passes Plan to Help Borrowers
The U.S. House passed a housing aid plan Thursday that would provide $300 billion to refinance mortgages for homeowners facing foreclosure.
Under the program, lenders will get an FHA guarantee on the loan if they write down the principal amount by 15 percent from the home’s current appraised value. The bill excludes investors and those who lied about their income on a loan application.
A companion measure would give first-time home buyers a $7,500 tax credit and provide $15 billion to allow communities to buy and fix abandoned homes. The vote on the FHA plan was 266 to 155, drawing support from 39 Republicans. The homebuyer tax credit was approved by a margin of 322 to 94.
The bill now goes to the Senate, which must debate and vote on it. President Bush has said he would veto the measure if it passes.
Source: Reuters News, Patrick Rucker (05/08/2008)
Posted by Carter Brown
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