NAR Board Affirms Need for Housing Stimulus
http://www.realtor.org/RMODaily.nsf/pages/News2008111101?OpenDocumentThe Board of Directors of the National Association of REALTORS® in its Monday meeting in Orlando, took actions to keep its members positioned for success in today's challenging real estate markets.
Economic Stimulus
The Board affirmed a four-point legislative plan that NAR is presenting to Congress as necessary to stimulate housing:
- Make the $7,500 first-time home buyer tax credit, created as part of the housing stimulus bill enacted earlier this year, available to all buyers and eliminate the repayment requirement.
- Make 2008 Fannie Mae and Freddie Mac loan limits of $729,750 permanent. Without additional legislation as part of a lame-duck Congress in the next several weeks, the high-cost loan limits will drop to $625,000 starting Jan. 1, 2009.
- Get the U.S. Treasury to target funds from the $700 billion rescue of Wall Street financial institutions to mortgage relief and create a mortgage interest-rate buydown program.
- Permanently bar banks from entering real estate brokerage or management, a long-time priority of NAR that has taken on a new urgency with the meltdown among some national banks.
As a taxpayer, I don't think this is the best for the country.
Comments
http://money.cnn.com/2008/11/11/news/ec ... /index.htm
But here's why it won't work.
In good times, it is recommended that total debt obligations not exceed 35% of one's salary. That leaves enough money to save for retirement, and save for rainy-days/emergencies. This plan will eat into those savings significantly, unless it is targeted only to those who have no car payments, no student loans, and little or no credit card debt. How many people at risk for foreclosure fall into that category?
So the plan is to just barely maintain a rather large class of Americans who will be permanently house poor and unable to move. It might, however, stem foreclosures for a time...unless these house-poor people experience a divorce or lose their jobs. Of course, the job market has already turned, so we will "fix" a bunch of mortgages, making them just barely payable, and then layoff the owner who has no emergency savings.
I'm looking at you, Pelosi.
It's fine, eventually they will just throw the entire plan away and roll the whole chunk into a taxpayer stimulus package. Go buy a new American made car with your $2,500 stimulus check!
Uh, no thanks. You couldn't pay me to buy an American car these days (indeed literally, if they send another stimulus, they will have tried). The quality is just too poor. I've had Toyotas and Hondas for the last decade and they've been great. Any stimulus I get is going into savings. I gotta look out for number one.
Housing is toast and most debates are just rhetoric by our "leaders" who are chasing their tails and have no clue what to do.....jabbering monkeys.
On the other hand, all efforts will be made to prop up the stock market so BOTH RE and WS don't crash in parallel. Although one could argue that the DOW going from 14000 to 8000 is more than just a "stumble". Case in point, Paulson does about an about face and says he is no longer going to buy up "toxic assets" and instead...you guessed it...buy bank stocks.
I have friends in their 60's who were oh so close to retirement in 2000 riding the "pets.com" boom only to lose everything when that bubble burst. Instead of investing in safe instruments and planning to live with less, they once again invested heavily in Tech/Financial stocks and some of them have lost 50% of their retirement since last spring...AGAIN!!!
While I feel bad for them, I warned them 3 years ago to cash out with "some gains" which is what I did. I missed the peak gains but can sleep at night knowing my nest egg is "safe".....at least until hyperinflation (thanx Helicopter Ben) sets in.
We live in interesting times.....some might argue a bit "too" interesting.
Tell me, why would you feel bad for utter fools who didn't learn their lesson the first time around? I'd be jumping with joy. Remember the other Chinese proverb - "Happiness is watching your neighbor fall off his roof".
Probably because these are his/her friends, and their second loss was more an act of desperation (gotta retire!) than an act of just poor investment. If there's one thing we've seen clearly the last 10 years it's that desperation is all it takes to turn investing into speculating into high stakes gambling.
I think that's perhaps it's a mistake to make the markets all about fear and greed, when for many people their greed is really just the impulse of them trying to "be normal". We've somehow set up in this society that if you don't own at least one house, don't have a 42" flatscreen TV, don't have at least two newer cars (less than 3 years old), don't have something of a motor boat, etc; then you are a failure.
I think as people we really need to re-evaluate what is important and what defines success.