President Bush signed a 300 billion Bill of Housing and Economic Recovery Act of 2008 today. With this 300 million dollars, estimated 400,000 home will be rid of foreclosure worries by end of 2009. First time home buyers will get a instant tax cut of $7,500, and more funds are available for Fannie Mae and Freddie Mac government backed loans.
For Californians, the good news is the conforming loan amount is risen from $417,000 to $625,000 permanently. This is especially crucial for Bay Area home buyers that the conforming loan amount is nearly matching the metropolitan median home prices. Home buyers can catch a breath of the down payment amount, with strengthened abilities of borrowing more money and with expectation of possible home appreciation.
With the influx of money, will the housing market turmoil be stabilized? May be so. If home owners who are in imminent danger of foreclosure come forward and work with their lenders for a new affordable rate, less houses will be in foreclosure process, home prices will be stable for a while, buyers will have abilities to borrow and bank will have money to grand loans.
Sound pretty good uh? The bottom line is the problem is temporary fixed, but you and I, the taxpayers have to tighten our belts for a long time to come.