San Diego real estate blog - Peter Toner

A new plan of attack for Market Relief is being discussed on Capitol Hill. The latest proposed plan is estimated to provide $15 billion dollars in “relief”. The plan is still in its infancy and many of the details still need to be agreed upon and approved between the House and the White House.

Here are the current details of the proposed Market Relief:

• When Dec 31st 2008 hits, the new FHA loan max’s set from the previous bill will become null and will change to a permanent new loan limit of $550,000.
• $4 Billion to go to neighborhoods hit hard by foreclosure and other elements of a struggling market. It is purposed that the local governments would use the money to rehabilitate the areas by purchasing the homes that are vacant and foreclosed upon, renovating as needed and then turning around and selling them…. in reality this money would really be just a “drop in the bucket.”
• The sum of one hundred million would be provided to those services that work to provide relief to homeowners that haven’t been making mortgage payments and stand to loose their home.
• Stricter penalties to lenders who do not provide the truth-in-lending disclosure to their clients in a timely manner during the loan transaction.
  A potential $7,000 tax credit incentive to buyer’s who purchase a foreclosed home.
• Write off options for home builders, a potential $6 billion dollar tax benefit.
• New Federal Tax deductions for homeowners who do not have itemized income taxes.
• A potential $10 billion dollar tax-exempt bond to local and state housing agencies to assist with the refinancing of those subprime borrowers facing payment increases they won’t be able to cover once their loans reset.

Many are skeptical of this proposed plan, they feel as though there is too much being done to assist the banks and the builders rather than the struggling homeowners. Any thoughts from our readers?