Not soon enough if ever. Let me explain.
Bush announced that the first 250 billion dollar infusion is targeted for the banks. Which will take time to do and time to see if it works. Which will mean that the balance of the money will not be used (350 billion dollar) until the next president is inaugurated in January 2009.
However, the Bush Administration has unveiled additional mortgage assistance for homeowners at risk of foreclosure. The HOPE for Homeowners program will refinance mortgages for borrowers who are having difficulty making their payments, but can afford a new loan insured by HUD’s Federal Housing Administration (FHA). There are a lot of issues to be dealt with, plus pre-qualifications needed by the homeowner, which means it will take time to be effective.
So what is offered by both candidates and when will it start?
Barack Obama proposed more immediate steps to heal the nation’s ailing economy, including a 90-day moratorium on home foreclosures at some banks. Obama proposed that banks participating in the federal bailout should temporarily postpone foreclosures for families making good-faith efforts to pay their mortgage.
Sen. John McCain proposed a plan to help millions of people around the country facing foreclosure by ordering the Treasury secretary to purchase and renegotiate faulty home loans.
The plan is aimed at homeowners who owe more than their houses are worth or who are otherwise in danger of foreclosure. The government would use Fannie Mae, Freddie Mac and private mortgage brokers to pay off the troubled loans and refinance the homeowners, making their payments more affordable.
Again, this will take time and concerted effort by the powers to be to implement any program before relief is felt by the homeowner who is facing foreclosure or who is in foreclosure.
The common thread above is TIME, no matter what you like or dislike about the government, the presidential candidates, or what is going on in Washington (D.C.).
Bankers/ Lenders, realtors, real estate investors, and all scam artists want you to believe that you do not have enough time and, especially, they do not want you to know how the foreclosure process works.
You are nothing more than a new profit center for them, and they only have their best interest at heart (not yours).
I have a short video that will show you how scam artists work, and it may help you understand what not to do. Check it out: http://www.AvoidForeclosurePain.com/Now.htm
My concern is that the economy will stay bad until there is liquidity in the housing market.
Most of the proposals I see to address that try to help people keep prices at the last sale value
which is artificially inflating prices over the current market clearing amount. The Economist
had an article on this:
http://www.economist.com/finance/displaystory.cfm?story_id=12470547
which cites Luigi Zingales – Plan B paper.
http://faculty.chicagogsb.edu/luigi.zingales/research/PSpapers/plan_b.pdf
It not only has a proposal based on things that have been done before, to avoid foreclosures
while lowering house prices to the market rate, but also addresses the connectivity risk
between banks and other financial institutions.
Anyone interested in thinking carefully about future economic policy should read Zingales’
Plan B paper.