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HOUSING BILL LIKELY TO PASS SENATE!

BILL WOULD ALLOW MORE FHA-BACKED LOANS, HIGHER LOAN LIMITS, AND AN $8,000 TAX CREDIT FOR FIRST-TIME HOME BUYERS!

This election year, the sluggish state of the U.S. Housing Market remains at the forefront.  Tougher lending standards, historically high inventory, and reduced consumer demand have translated into falling home prices in many markets - including parts of Chicago and the suburbs.  Many home owners are "upside down" in their mortgage - they owe more on their loan then their house is worth.  Foreclosures rise with each month!

A Housing Bill passed by a wide margin in the U.S. Senate today might provide some relief, however - but the measure is far from sure of becoming law.

The keystone of the proposal would rewrite many of the rules by which the Federal Housing Authority, as well as federally-sponsored loan purchasers and guarantors, Fannie Mae and Freddie Mac, have had to live by for many years now.

It would let the FHA back up to $300 Billion in new mortgages - providing home owners now struggling with an affordable, fixed-rate alternative to the rate-adjusted sub-prime loans many are now holding.  It would increase maximum loan limits for these loans - to $625,000, possibly more - from the current $417,000 level in most parts of the U.S. 

The legislation, if passed, would provide a tax credit of as much as $8,000 for first-time buyers, and would incentive those who purchase and rehab foreclosed properties. 

According to Senator Christopher J. Dodd (D - Connecticut), "Unless we act and do so promptly, we're going to look at a situation that only gets worse."

However, opposition to the bill in the U.S. House, and by the Bush Administration, remains high.  Democrats in Congress are divided over several key elements of the bill - including acceptable loan limits, foreclosure incentives, and time for implementation - quickly, or over time.

The White House feel the foreclosed properties incentives comprise a "bailout" of lenders - many of whom, the Bush Administration feels, contributed to today's credit and mortgage problems.

Seller-funded Down Payment Assistance Programs continue to draw the ire of the administration, while the Congressional Black Caucus supports these programs that they feel will stave off blight in many stressed communities.  Many African-American home buyers, say caucus members, rely on these assistance programs in order to buy a home.

Today's Wall Street Journal, in an article from the Associated Press, provides more info.

DEAN MOSS & DEAN'S TEAM CHICAGO

Posted: Thursday, July 10, 2008 7:41 PM by Dean's Team

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