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2010-09-20 14:20:16
How To Fix Housing - Another Tax Credit?

What is the fix? How do we stop the bleeding?

The facts show that, four years after the peak, the housing market is still struggling. Things may be getting 'less worse,' but it's still remarkably bad, in too many areas, across the country.

• The pace of foreclosures is slowing, even as lenders took back more homes in August than in any month since the start of the U.S. mortgage crisis, RealtyTrac reports.

• Existing home sales in July plunged 27.2%, the most on record.

• The number of so-called underwater mortgages has declined for two consecutive quarters. However, in June, there were still 11 million homeowners stuck with a mortgage greater than the value of their home, according to Corelogic.

So far, the government's HAMP -- mortgage modification plan -- and most other government solutions have failed to change the dynamics.

With that in mind, Glenn Hubbard, the chairman of the Council of Economic Advisers under President George W. Bush and the dean of the Columbia Business School, says he has a plan to help turn things around.

He proposes having government-sponsored entities like Fannie Mae, Freddie Mac and Ginnie Mae offer quick and easy refinancing to underwater homeowners.

He writes in a recent New York Times op-ed:

'Consider a family that bought a home in 2006 for $225,000, taking out a $200,000 fixed-rate mortgage at the prevailing 6 percent interest rate with monthly payments of about $1,200. That home is now worth about $175,000. The family still owes $189,000 and thus cannot refinance because they are underwater.

'But under our proposal, the family would be offered a new mortgage at today's prevailing rate of 4.3 percent. The family would see a 15 percent decline in their monthly mortgage payment, saving more than $2,000 per year. This would not only help homeowners through the current crisis, but would be the equivalent of a 26-year tax cut of more than 4 percent of income, assuming the family spends around 30 percent of income on housing.'

Sound great? It might work, but as Aaron and Henry discuss in this clip, having GSEs back these refis would be one more taxpayer-backed bailout for banks in danger of losing money on their real estate holdings.

Hasn't the taxpayer done enough already?

Blog Archive
2012-10-24 15:26:05
Utah's Real Estate Market Makes A Come-Back

2012-03-19 17:02:37
Foreclosure Filings Slow In Utah But Spike Elsewhe

2012-02-22 08:47:11
National Home Sales SURGE In January

2011-08-26 00:35:10
2nd Qtr Market Statistics

2011-08-09 19:11:52
SLC Named in Top 15 for Business

2011-03-28 13:44:09
13% of US Homes Sitting Vacant

2011-03-17 20:44:34
1st Qtr Home Values Survey

2010-10-14 17:03:45
Forbes Names Utah No. 1 For Business & Growth!

2010-10-06 11:39:36
9.3% Increase In Purchase Home Loans

2010-10-04 16:01:52
Pending Home Sales Rise

2010-09-21 12:50:59
Housing Starts Jump 10.5% - Build Permits Also Up

2010-09-20 14:20:16
How To Fix Housing - Another Tax Credit?

2010-09-19 21:39:32
Large Fire Near Camp Williams

2010-09-16 09:25:06
Nationwide Foreclosure Numbers

2010-09-15 18:34:54
Here Comes The Double Dip In Home Values

2010-09-15 16:35:50
Utah Foreclosure Filings Up 55%

2010-09-14 22:38:30

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