No New Housing Initiative in Bush Economic Plan
On Friday, President Bush unveiled an economic plan that focuses almost entirely on tax rebates and incentives. However, some are upset that the Bush economic plan fails to push any new housing initiative. The National Association of Realtors is especially disappointed over his failure to recommend a change to conforming loan limits. Inman News reports on the Bush economic plan:
A $150 billion economic stimulus package unveiled by President Bush Friday doesn’t address a top priority of the National Association of Realtors — raising the $417,000 conforming loan limit to allow Fannie Mae and Freddie Mac to purchase “jumbo” loans. …
Although the president today renewed his calls for Congress to pass legislation modernizing Federal Housing Administration loan guarantee programs, he announced no new initiatives specifically targeted at reviving housing markets or mortgage lending.
NAR, among others, believe that raising the conforming loan limits will help stimulate depressed real estate markets in various areas of the country. Raising the limit from $417,000 to $625,000 in high-priced areas such as Hawaii, New York, California and others will help market liquidity, they argue.
The focus was instead on tax incentives that may help increase spending by American consumers, but would be unlikely to help in terms of preventing foreclosures and improving the real estate market. Despite the lack of housing initiative in the Bush economic plan, there are measures underway in Congress. The House has already passed a bill raiding the conforming loan limits, and it is part of a current Senate debate, reports Inman:
HR 1427 would give Fannie and Freddie the power to guarantee and securitize loans of up to $625,000 in high-cost housing markets, but not hold them in their own investment portfolios. New York Democrat Sen. Charles Schumer introduced a bill in September, S 2036, that would create a one-year window for the GSEs to purchase such loans to hold in their portfolios.
Tags: Bush economic plan, mortgage blog, home mortgage loan, foreclosures,
tax incentives, conforming loan limits, housing initiative
