Both presidential candidates have announced plans to help voters deal with the challenging housing economy.
Here are their ideas as posted on their election websites:
Sen. John McCain:
Direct assistance to homeowners. No taxpayer money should go to real estate speculators who made bad decisions about investments.
Reform financial and lending systems to prevent a repeat.
Require participating lenders to forgive part of subprime borrowers’ loan principals and place them into new 30-year Federal Housing Administration loans.
Give financing to municipal and civic groups trying to solve problems within their own communities.
Sen. Barack Obama
Create a standardized disclosure plan that allows for full-disclosure of loan costs and provisions.
Crack down on mortgage fraud.
Give a mortgage credit to those who don’t itemize deductions.
Create a fund to help homeowners who face foreclosure refinance.
Allow bankruptcy courts to modify a homeowner’s mortgage payments.
Source: The San Diego Union-Tribune, Lori Weisberg
Earlier today President Bush signed into law a number of very significant changes that will occur starting October 1st. Please read these changes as they affect all of us and our Home buying abilities.
Details of the Housing and Economic Recovery Act are as follows:
The two items in bold will have the greatest immediate impact so please read these carefully.
Higher permanent loan limits for conventional conforming and FHA loans will become EFFECTIVE January 1, 2009. The act calls for limits to increase to a maximum amount of 625,500 , depending on the metropolitan area. The temporary limits established in March 2008 are set to expire December 31, 2008
-FHA floor limit to remain at 271, 500
-VA guaranty will increase
**Minimum cash investment for FHA loans WILL increase to 3.5%**
-A moratorium on RISK Based Pricing for FHA loans will go into effect on October 1, 2008
**Seller Funded Down Payment Assistance with FHA loans will be TERMINATED on October 1, 2008. No more DPAs like Nehemiah & American Dream.**
-Condo processing for FHA loans will be streamlined
As the race for the presidency shapes up as a contest between Sen. John McCain, the presumptive Republican nominee, and Sen. Barack Obama, who will claim the Democratic nomination, here are their initial positions on housing and related economic issues.
1. Proposes to spend up to $10 billion to allow some home owners to trade high-interest, adjustable-rate mortgages for fixed-rate loans.
2. Proposes a suspension of the 18.4-cent federal gas tax and 24.4-cent diesel tax during the summer.
3. Supports a middle-class tax cut by doubling the personal tax exemption for dependents to $7,000.
4. Calls for a simpler tax system with two tax rates and a generous standard deduction.
5. Supports making permanent the 2001 and 2003 income tax cuts and proposes cutting the corporate tax rate to 25 percent from 35 percent and allowing businesses to immediately write off capital expenses.
6. Maintains that government assistance to the banking system should focus on preventing systemic risk that would endanger the financial system and the economy.
1. Calls for greater government regulation of the U.S. financial system and proposes a new $30 billion economic stimulus plan to help home owners, including a $10 billion foreclosure prevention fund to help people keep their homes and $10 billion in relief for state and local governments hit hardest by the housing crisis.
2. Outlines six “core principles for reform” that would give the Federal Reserve supervisory authority over any financial institution to which it might make credit available and calls for reform and streamlining of financial regulatory agencies.
3. Wants to repeal a provision in the bankruptcy law so ordinary families can modify terms of home mortgages.
4. Proposes a 10 percent mortgage tax credit for middle-class Americans.
Source: Reuters News
The real cost of housing is significantly higher than we think when transportation is factored into the equation, according to a joint study by the Center for Neighborhood Technology and the Center for Transit Oriented Development.
These organizations have developed a database that measures affordability in 52 major metropolitan areas around the country. Its interactive maps show the cost of housing alone as a percentage of income and then the cost of housing plus transportation as an income percentage.
The farther from public transportation a community is located the higher its cost of living. In some cities, the cost of housing is less than 30 percent of income, but when transportation is added in the costs can be as much as 65 percent of income.
“Gasoline at $1 and gasoline at $3 are whole different worlds,” says Dave Van Hattum, program manager for the St. Paul-based Transit for Livable Communities. “This (Web site) map brings it home to people.”
Source: Center for Neighborhood Technology and St. Paul Pioneer Press, Bob Shaw (04/22/2008)
This is why I Iive in the West End of Atlanta 🙂 We have Marta at our door- the bus, train and the most important feature a New Yorker (like myself) can ask for…..SIDEWALKS!!! Now we will have the BeltLine, bike paths and a trail to other neighborhoods. At this time, there is no better place to buy Real Estate in GA.
Immigrants Often Targets of Subprime Scams
Immigrants have long been victims of fraud, but the subprime mortgage boom has provided a particularly popular avenue for unethical lenders to take advantage of immigrants.
Housing counselors say they have seen predatory lending to immigrants across the U.S. Among the vulnerable groups: Latinos throughout California, Caribbean and African borrowers in the New York area, and Russian immigrants in Philadelphia.
Immigrants with limited English skills tend to be trusting, especially when people with roots in their own countries offer them what appear to be good opportunities and easy money, says Katrina Vizinau, a counselor at Community Housing Development Corp. in New York City.
Source: The Wall Street Journal, Jonathan Karp, Miriam Jordan (12/06/2007)