Posts Tagged ‘congress’

Meet the caulkers

Tuesday, December 15th, 2009

In an effort to reduce unemployment and increase the number of energy-efficient homes, President Obama is pressing Congress to pass incentives for homeowners who retrofit their homes.

The president is scheduled to tour a Home Depot in Virginia on Tuesday to make his case that creating more energy-efficient homes will create jobs and save families money on their utility bills. No word yet if the president plans to teach any DIY classes.

DHW asks: Do you think Congress should approve Cash for Caulkers?

Bill seeks to protect homeowners with Chinese drywall

Monday, November 23rd, 2009

U.S. Representative Charlie Melancon of Louisiana introduced the Drywall Victims Insurance Protection Act. If passed, insurance companies will be prohibited from canceling or refusing to renew homeowners’ insurance policies on grounds related to Chinese drywall. The bill also restricts insurance companies from altering pricing or coverage due to Chinese drywall related problems.

Policyholders will still maintain the right  to sue insurance companies  over dropped coverage. Property damage related to Chinese drywall is estimated to be as high as $3 billion.

DHW asks: Have you had homeowners insurance cancelled due to Chinese drywall?

Frank pushing proposal to lend money to unemployed homeowners

Tuesday, November 17th, 2009

Using some of the interest paid back to the government on money lent under TARP, Rep. Barney Frank is proposing a bailout for homeowners who are having difficulty making mortgage payments due to unemployment.

The Obama administration’s plan to fix the mortgage crisis has been criticized for being light on aid to unemployed homeowners. A congressional oversight panel revealed in a report last month that the $50 billion program “was not designed to address foreclosures caused by unemployment,” now the main cause of default.

Franks proposal, actually developed by Congress in the 1970s but never funded, was part of legislation introduced in September titled the Main Street TARP bill. Rep. Barney Frank is chairman of the House Financial Services Committee.

“These are people who are very responsible, very thoughtful. They got a home, it’s above water, they’ve got equity, but they’re unemployed, and you can’t afford mortgage payments on unemployment,” said Frank.

If passed, it would provide $2 billion for low-interest loans to unemployed homeowners who have the prospect of being able to continue making mortgage payments in the future.

Rep. Barney Frank is chairman of the House Financial Services Committee.

DHW asks: Do you know anyone in default of their mortgage due to a loss of employment?

Stevens: FHA sublime, not subprime

Monday, November 16th, 2009

During a speech to the National Association of Realtors in San Diego, FHA Commissioner David Stevens said his agency is not headed for the same fate as Fannie Mae, Freddie Mac or the subprime sector. Concerns about the FHA’s financial well being were raised last week when it was revealed in an independent audit that the agency’s funds were below legal guidelines.

The Commissioner sought to minimize these concerns, reporting the agency had $31 billion in capital – an increase of $3.5 billion from a year ago.

Stevens went on to say that the FHA is  “the only participant in home financing services in the U.S. economy that hasn’t needed a bailout, hasn’t needed (funds from the government’s Troubled Asset Relief Program), hasn’t needed special assistance and is still completely self-sustaining.”

The AP reports the FHA has insured almost 25 percent of all new loans made in 2009. Eighty-percent of these loans represent first time home buyers.

Stevens rejected comparisons between the FHA and the subprime market.  “Nothing could be further from the truth,” he said, stressing the FHA has far more stringent underwriting guidelines for the loans it insures.

As the unemployment rate has risen, so have FHA’s losses. According to the Mortgage Bankers Association, approximately 17 percent of FHA borrowers are at least one payment behind or in foreclosure. This compares with 13 percent for all loans.

The FHA does not make loans. It insures against default, taking much of the risk away from lenders. FHA loans have grown in popularity in recent years as credit markets have tightened up. The agency’s 203K rehab loan is also growing in popularity as more first-time home buyers purchase foreclosures.

DHW asks: Do you think the FHA is at risk of needing a government bailout?

Will expanding the housing tax credits beyond first time homebuyers contribute to housing inventory woes?

Sunday, November 15th, 2009

The Capital published an intriguing article addressing the potential side-effects of expanding the housing tax credits beyond first time homebuyers. The article raises some fair questions with regard to existing homes needing to be liquidated so that current homeowners can take advantage of the housing tax credits now afforded to them. The Capital article focuses on housing inventory in D.C. and its surrounding area. However, this potential side-effect could present itself in other parts of the country.

DHW asks: Do you think expanding the housing tax credits beyond first time homebuyers will increase housing inventories?

Audit: FHA’s reserve funds way below what law requires

Thursday, November 12th, 2009

From The Washington Post : ‘FHA’s cash reserves have dropped well below amount required by law, audit shows’

DHW asks: Do you think the FHA’s reserves will hit zero?

FHA loan limits in your area

Realogy CEO just doesn’t get it.

Wednesday, November 11th, 2009

In a CNBC interview this morning, Realogy CEO, Richard Smith, called on FHA to increase its minimum required down payment of 3.5%. Mr Smith suggested the ‘risk profile’ will have to change to stave off foreclosures. This argument only perpetuates the myth that those who put less money down are somehow less attached to their home than those who put down a significant amount. Mr Smith should have taken the opportunity to call on the administration and Congress to cure the real problems that cause mortgage delinquencies.

The Urban Institute, a Washington D.C. based think tank, issued a study recently that revealed some interesting, though not surprising, data. Those who put little or no money down tend to be more poor than those who put, say, 20% down. They are also less likely to have health insurance. Someone who has health insurance is more likely to miss less work due to an illness than someone who has no insurance. This is only one example cited in the Institute’s report. 

Although many pundits, including Mr Smith, suggest the nation’s recovery is tied to housing, it is not. It is tied to job creation. You cannot have a 10% unemployment rate and expect to have a stabilizing housing market.

Reology is the world’s largest brokerage operator. They own Coldwell Banker, Century 21, Better Homes and Gardens Real Estate and ERA. 

DHW asks: Do you think the FHA should increase its minimum required down payment?

Critics be damned. Home sales up, prices down

Tuesday, November 10th, 2009

Critics of the Housing Tax Credit were quieted, if only briefly, when the National Association of Realtors (NAR) released data for third quarter home sales. According to the trade group, home sales increased by nearly 6% over this same time last year. Despite the spike in sales, prices have fallen more than 11% during the same period. The U.S. median existing single-family price for the third quarter was $177,900.

Opponents of the housing tax credit feared an inflationary reaction in home prices. Although housing inventories are down, existing units still outweigh the demand.

NAR chief economist,  Lawrence Yun, predicts home prices will stabalize next spring. His prediction may be overly optimistic. Foreclosures and short sales made up 30% of thrid quarter sales. There is no real evidence to suggest foreclosures will take a breather in 2010.

DHW asks: Do you see a bottom to the housing market?

Done! Obama signs bill extending, creating Tax Credits

Friday, November 6th, 2009

President Obama signed bill  H.R. 3548, extending unemployment benefits for all states and extending the $8,000 Tax Credit for first home buyers. The bill also creates a $6,500 tax credit for those home buyers who have owned their current primary residence for at least 5 years.  See ‘Housing Tax Credits’ for more details. You can also see how congress voted.

Remember: The $6,500 tax credit took effect when the President signed the bill.

DHW asks: Will this encourage you to buy a home?

See how Congress voted on Tax Credits

Friday, November 6th, 2009

GovTrack, a self-described nonpartisan website, released Congressional votes on bill H.R. 3548 Worker, Homeownership, and Business Assistance Act of 2009.

See how Congress voted.