[Shores9]

It’s called the ‘Homeowner Affordability and Stability Plan” and it’s meant to steady the housing market, especially in states like Florida.

There’s debate among experts about its effectiveness but it seems overall most agree that something is better than nothing. I personally think that it will help a majority [of people] but only by a thin margin – say around 55-60%. If it helps put a base on the housing slide (which is questionable) then that may be the beginning of a broader economic recovery. If that happens the fallout rate and price tag of such a program may well be worth it.

There is however some huge inequities with this kind of plan. It favors states like CA, NV, FL that have had a high rate of speculation and greed to the detriment of tax payers in states that were less prone to such excesses. It also in effect rewards individual people who have already purchased a home and stretched what they could afford or who are now under water (or both) over those who have waited to build a proper down payment and find [or wait] for a more affordable home.

Some will get the benefit – all will pay the price.

[Muggy]

[Shores9]

Of course it’s way too early to tell what will or will not work but the current housing rescue effort is showing early signs of promise. In an article published by Reuters Mortgage lenders busy after Obama plan laid out | U.S. | Reuters the immediate reaction seems to suggest that people are seeing this as a positive move that has encouraged them to get out and refinance or purchase.

It is entirely possible that this rescue plan could reduce existing inventory or keep new inventory form reaching the market to the tune of several million homes. If this does happen and even a small percentage of fence sitters jump in and buy... the slide in housing could quickly turn.

I am by no means turning back to real estate cheerleader (not yet). As for the real estate business – the old days are gone!! Anyone who thinks Realtors and the real estate business will recover back to normal is in denial.

Housing cheerleader in Oct Nov & Dec 2006 – Not so Accidental Prophet in Jan 2007 to Feb 2009

[Shores9]

During his campaign Obama said 'I'm going to spread the wealth around,' and with his stimulus packages he is doing just that.

The housing plan will allow homeowners who have little or no equity to refinance their homes (something they can’t currently do) as well as government-subsidized loan modifications for borrowers in upside down loans to reduce the amount they owe. It would also allow bankruptcy judges to reduce the principal on primary residences.

However, lots of borrowers wouldn't be eligible and even more do not need the help and as a result don’t qualify or get a dime.

Don’t own a home – sorry you don’t qualify – although you get a tax credit bone if you purchase
Own a home but have plenty of equity in it and you were prudent not to have a payment that exceeds you abilities – you don’t qualify
Lost your job, got sick or disabled and can’t show the ability to repay - you don’t qualify
Own a home with a jumbo mortgage – sorry you too don’t qualify.

These efforts are “Government Subsidized” so you DO get to pay for them even though you DON’T qualify to benefit from them

Yes – Obama is spreading it around – unfortunately at the expense of those who were prudent by purchasing within their means or deciding to wait until they could afford to so.



Housing cheerleader in Oct Nov & Dec 2006 – Not so Accidental Prophet in Jan 2007 to Feb 2009