I am appalled and disgusted by the new Housing Rescue Plan that was approved by Congress over the weekend. There’s nothing good about it, despite the appeals to “fairness” and “stress”.

Nevertheless, the bill has been approved by the US House of Representatives and the US Senate, and President Bush has said he’ll sign it. That’s expected to happen right away.

Since it’s going to become law regardless of the clearly questionable nature of the legislation, you may as well get more familiar with it and learn how to work it to your best advantage - and learn what strategies to avoid as a result.

In the interest of disclaimer, I have not yet read the legislation in full. My comments here are based largely on my reading about the bill in the media. Nevertheless, here are a few points that I think are interesting and worthy of some further research:

• Investors Cut Out Of Short Sales: The legislation attempts to stave off foreclosure for approximately 400,000+ home owners by offering new government-backed financing for the distressed home owners, as long as the original lender agrees to take a loss. Essentially, the federal government will be giving loans to home owners to finance their own short sales, cutting investors out of the picture.
• $7,500 Tax Credit For First Time Home Buyers: If you’re selling entry-level homes, this is something that I’d learn more about and would use it aggressively in my marketing. The details of how this will work is not yet clear, but if I was targeting the first-time home buyer market I’d certainly look to learn more about this program and offer assistance to my buyers for getting the tax credit. This could be a great way to differentiate yourself from your competition
• A “Blank Check” To Support Fannie & Freddie: The government has committed to giving as much of your money to Fannie Mae and Freddie Mac as they need, albeit for a limited period of time. Since the government has just “eliminated” the risk exposure of Fannie Mae and Freddie Mac, you can expect a similar type of problem to arise sometime in the next 10-20 years.

Let me reiterate - I’m not yet intimately familiar with this legislation and more details are going to emerge in the coming days and weeks. But it’s not good - not good at all.

Your comments and questions are welcomed here at FreeRealEstateTraining.com…

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