As the stimulus bill works its way through and looks to have an impact, many people on wall street aren't so happy with Obama and the bill. I want to take a further look at how the bill will affect home buyers and future home buyers.
The anti-foreclosure plan boosts Fannie Mae and Freddie Mac's capital by $200 billion and allows homeowners to refinance loans of up to 105% of the house value. This is above the usual 80%. There is also $75 billion worth of incentives to enable home buyers to modify their loans. If you watch the clip above you will understand why some people are livid.
I pose the question to all of you... should you be responsible for someone who got into a home with a mortgage they can't afford? What about the investors and wealthy individuals who can't refinance their own mortgages because there home values have decreased which makes their debt/equity ratio lower and not able to refinance. There are many individuals who bought homes that they could afford but with so many foreclosures and price declines, what are they to do. Everyone is hurting! But why give money to people that shouldn't be in their house in the first place. Is it so bad to let capitalism work its course and let people go bust?
I don't believe there is one solution, but I do believe that a lot of consumers who put themselves in these lavish homes that they couldn't afford in the first place should not be bailed out. What about letting the investors and wealthy refinance? Aren't they the ones that were buying all the houses in the first place which helped grow the economy. Many questions to ask with so few answers from the White House.
Some economist think real estate has flattened out and has hit the bottom. Is it time to buy? I would be on the sideline for this one until we gather more information on what will transpire from the stimulus bill.
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