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Home Foreclosure Plan

March 10th, 2009 2:59 PM by

Recent steps by the government including a tax incentive for first-time home buyers and a plan to delay foreclosures seems like it won't be enough to counteract the credit and economic stresses that are weighing on the housing market.  The Obama administration last week announced a $75 billion plan to help millions of struggling borrowers stay in their homes by modifying the mortgages.  Meanwhile, the economic stimulus package contains an $8,000 tax credit for first-time home buyers who purchase between Jan. 1 and Dec. 1, 2009 -- this credit doesn't have to be paid back, unlike the $7,500 perk available in 2008.

Still, some analysts are warning that despite the government's efforts and improving affordability as prices and mortgage rates fall, the housing market is unlikely to improve a great deal.

The foreclosure plan unveiled this week is designed to provide assistance to 9 million at-risk homeowners. Although the proposal was greeted well by some lawmakers and bankers, skeptics expressed concern that the plan may have a difficult time getting off the ground.

Home-builder stocks have traded lower since President Barack Obama announced the Homeowner Affordability and Stability Plan. The plan's goal "is to help homeowners avoid foreclosure," investment strategist Ed Yardeni said Thursday. "It does nothing to reduce the huge overhang of unsold new and existing homes."
 
Housing starts are down a record 56% in the past year and are down 79% from the peak three years ago, the Commerce Department reported Wednesday.
 
 
 
some information obtained from www.marketwatch.com
Posted in:General
Posted by on March 10th, 2009 2:59 PM

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