Monday, July 28, 2008

Housing and Economic Recovery Act of 2008

On Saturday, the Senate voted 72-13 on the Housing and Economic Recovery Act of 2008. H.R. 3221 bill (the House passed it Wednesday 272-152) will provide:

-- mortgage relief for 400,000 struggling homeowners
-- temporary financial lifeline to Fannie Mae and Freddie Mac and them the Federal Reserve consultation
-- nearly $4 billion in neighborhood grants that will primarily help lenders
-- $180 million in pre-foreclosure counseling for struggling homeowners
-- $15 billion in tax cuts, low-income housing tax credit, and a credit of up to $7,500 for first-time home buyers for houses purchased between April 9, 2008, and July 1, 2009
-- added an $800 billion increase, to $10.6 trillion, in the statutory limit on the national debt.

President Bush says he will sign the bill when he receives it.

Many of these debt-strapped homeowners owe more their houses are worth. The legislation will allow them to get new, more affordable mortgages backed by the FHA.

The out-of-control GSE's Fannie and Freddie will be allowed to increase to $625,000 the size of home loans that can buy and the FHA can insure. They also will be able to buy and back mortgages 15 percent higher than the median home price in certain areas.

In those neighborhoods with high foreclosed and abandoned properties, the bill will inject funds for repairs hoping the new looks will improved property values.

Despite the election year compassion that the congressional reps thinking they are providing, this is a bail out. What does this do for 95 percent of the homeowners making their payments?

Why does the government think that people should have their mortgage reduced because the value of their homes are now lower than what they were when they bought them? Will they give that money back when they sell the property in 10-20 years after the value has increased back above that original valuation?

Is it the government's responsibility to ensure every American (or anyone living here) is entitled to live in a home? That the mortgage or ability to pay is just a sidebar to the great American dream?

The squeaky wheel gets the oil. This is a good deal for a few thousand people and for lots of lenders. the bulk of those made poor financial decisions. It is a BAD deal for the bulk of the taxpayers.

Another taxpayer bailout sponsored by both political parties.

In the Senate count, the two, not-so-fine Senators from Utah split their vote. In the House, Mathason voted with his Democrat brethern, Cannon against it, and Bishop did not vote. McCain nor Obama voted.

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