By now, nearly all, if not all of America’s citizens are aware of the housing crisis that has erupted in the past several years. Because many homeowners intended to speculate upon the housing market, they are now in massive amounts of debt that they never dreamed they would have to pay back. This is especially applicable to the baby boomers that decided to invest in this manner. Back in the housing market of the 1990′s, this type of an investment was relatively safe and reliable. Housing prices were up, the stock market was booming and the craze of the business world and the stock market, alike, was the idea of the dot.com enterprise and the supposed success and promise that these business seemed to be headed for.
However, after the dot.com businesses went south, the market was left without a direction for the future. Though some of the internet businesses made it through the difficult times, many investors in the United States lost large amounts of money as a result of all of this change.
This situation is not unlike the ordeal that the housing market investors are going through at this point in time. The market that they thought would be so successful is now sinking rapidly, although there was not much, if any, indication of this happening. In the past several months, the United States government has been hard at work figuring out a way to ease this crisis and help the struggling lending companies in the U.S. Historically, Fannie Mae and Freddie Mac have been very stable lenders. However, with the recent downward trend in the housing market, they have been struggling as well.
In July 2008, the Congress sent legislation before President Bush that would give relief to those in the general public that were caught up in the housing crisis as well as the large companies in need of some help. How the legislation works is as follows.
For starters, the government is offering $7,500 in tax credit for first time home buyers if they purchase they home before July 1st of next year. This is a neat way for the government to give first time buyers a bit of a break in this current market.
Another good thing that the Foreclosure Act put forth is the requirement for lenders to furnish copies of mortgage documents at least seven days prior to the loan closing procedures. It is always good to have paperwork as a back up in case something goes wrong and legal procedings become necessary.
The government is also offering federally-backed mortgages to those that reside in places where it is extremely expensive to buy and maintain a home. The living expenses in the Boston and Nantucket areas are very high at the moment, which made them eligible for the governments help with raising the ceiling for the amount of money that homeowners can collect on a mortgage.
There are several other aspects of the crisis that the Foreclosure Act addresses, but the ones that have been mentioned above are the most critical. Hopefully this governmental action will help many of those in the United States that are struggling to get out from under the debt that they owe.
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