We’ve seen bailouts happen for the financial industry and for the auto industry, but none for the housing market. But that is slowly changing now. Real estate is 16% of our nation’s economy, and thankfully, it’s getting attention in Washington to receive financial assistance.

What’s on the table as of now for the housing market

Homeowners to get rescued-A bill is being written now to use TARP money to reduce foreclosures substantially. Stopping foreclosures will keep responsible homeowners in their homes, and will prevent neighborhood property values from dropping drastically. The bill will call for 40 to 50 billion dollars of TARP funds to mitigate foreclosures, and hopefully will be implemented by the first of April.

In October, the Hope for Homeowners program was put in place, but due to its costs and requirements, it has helped no one so far. And with the infusion of TARP money, the costs and requirements will be loosened so that the program will actually work to benefit homeowners and lenders.

Bankruptcy law to be reformed-Right now, bankruptcy laws are too strict, so banks are asking for a reform. If the reform is implemented, troubled homeowners will be given the chance to modify their mortgages. This kind of reform will help more homeowners, with all types of credit scores, be able to get a loan because right now mortgage security investors are demanding high interest rates to compensate for the risks, meaning that only a select group of people are able to acquire loans. We need more homebuyers to spur growth and progression in our real estate markets!

Bigger tax breaks for homebuyers-The National Association of Home Builders have been pushing for a temporary tax credit for first time homebuyers  worth up to 10% of the purchase price. A tax credit being a dollar-for-dollar reduction of one’s tax liability. It’s just that the recipients of the tax credit would have to pay back the break over time. The tax credits wouldn’t prevent foreclosures, but could spur economic growth.

Push interest rates down-The interest rate right now on a 30 year fixed loan is 5%, and that’s substantially low. But the National Association of Realtors is pushing for more of a drop, and this is a necessary move in my opinion. This will stimulate more people to consider becoming homeowners. But what we really need is the availability of those low rate loans be much more accessible to the American public.

Finally, we are seeing some progress since the crash of the housing market. Everything important takes time, folks. It took at least 8 years for us to get into this mess, and it’s going to take time to get out. At least we are seeing the start to something positive.

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