The Housing Bill - A Panacea or False Hope
By
Marc Grossman
OK, so President Bush signed what’s
been commonly called the
Housing
Bill. It’s being touted as a panacea for our
mortgage
and housing market ills, but unfortunately
comes nowhere near to being such. Again, I must restate from a
previous post,
The
American Housing Rescue and Foreclosure Prevention Act,
it should be called the
Banker
Bailout Bill. Forgive my cynicism, but numbers
and figures are being touted and we, the taxpayers that are footing
this bill, are going to be in for a major surprise in the long haul.
Before we go into that, I’ve read
many articles and posts critical of the fact that First
Time Homebuyers are being offered a tax
credit as opposed to a tax deduction. The
difference being that the credit will have to be paid
back interest-free, mind you, over a 15
year period; while a deduction would basically
just be a freebie. What I also think is good about this measure is
that they, our leaders legislators, did not limit
this to vacant homes as had been anticipated.
The fact that this loan has to be paid
back is only fair because by doing otherwise you’re penalizing
others who bought prior to this enactment or afterwards. Mind you
this is only for first-time
homebuyers, which includes those who haven’t
owned a primary residence in 3 years, and the
home has to have been bought between 4/9/08 and 7/1/09.
Anyway, will
this stimulate the purchasing of homes? I
think it will have little effect in that you still have to qualify
for a loan with stiffer requirements and down payments.
One of the main concerns that I see
with this bill is the Fannie
Mae and Freddie
Mac bailouts. Let me clarify, not the fact
that they are being bailed
out, but the basically unlimited
funds that they are being given access to. All
we’ve been hearing about is the estimated costs this bailout will
be. But they are only talking in the short-term, there is no way to
accurately estimate the costs over the long haul.
A good portion of this bill is aimed at
those with at-risk
mortgages at possibly having the ability to
refinance
at a fixed rate and that the new mortgage will
be government backed by the FHA.
Firstly, the lender has to be willing to go this route since it is
totally voluntary.
Some surely will in that they’d rather have their money than your
property. But more than likely the mortgagee is not going to get
such a great deal. Do
you think that the lenders are going to go out of their way to give
you, the borrower, a better deal? Seriously!
But on the other hand if they do go
this route, it is most likely cheaper than going through a
foreclosure. The other problem I see is that who’s
to say that the borrower won’t go into foreclosure with the new
mortgage. Again, more loses and costs to the
taxpayers.
What really gets me is
why is there a need for a federal database of personal data and
fingerprints of anyone who basically has anything to do with the
originating of a loan? Loan originators are
licensed in Florida, where I’m located, and I gather most states in
the union. This is just abhorrent in that it appears that the
government wants more information on its citizens and they’re
utilizing this fiasco to weasel their way to getting such.
To further the indignity, one part of
the bill requires
banks to report information on all debit and credit card
transactions.
Excuse me, but when did my spending habits become the government’s
business? The more and more that I’ve learned about this bill, the
more I kept on hearing George
Orwell’s Big Brother in 1984
in my head. OK, so there are other things running around in my head
as well – go figure!! I believe in rules and regulations, but this
is just going too far.
Lastly, I want to leave you with this
tidbit. It appears that a provision in the bill is to assist
Chrysler (even though they aren’t mentioned
directly) to benefit from a corporate
tax incentive even though they are only a LLC,
a partnership. Huh, and this has what to do with the topic? All I
can say is good lobbyists and whoever else they have on the payroll
or campaign donation list.
So what do you think? Is
the Housing Bill a panacea, a fiasco or even somewhere in the middle?
See you next time at Marc’s
Corner!