Real Estate Blog - Tracy, Ca

In The WORKS.....

$7,000 tax credit for those who purchase — and plan to live in — foreclosed homes.

$25 billion in tax relief over three years for banks and home builders.

$4 billion in grants for communities to buy and fix up abandoned homes.


from the wsj.com

The $7,000 tax credit is an incentive for the market to respond. It will inspire qualified buyers to get off the sidelines and enter the market. It will allow us to replace loan defaults with good mortgages, helping to stabilize housing prices for all homeowners. The tax credit for homebuyers worked in 1975 and it will work again today.

Sen. Johnny Isakson (R., Ga.)
Washington

The Senate, by a 82-12 vote last week, approved $15 billion Foreclosure Prevention Act of 2008 that recently passed the Senate. Once approved by Congress and the President you will be able to take a $7,000 tax credit with the purchase of EACH foreclosure property acquire.


Here is a link to a great Q&A format article regarding what the goverment is currently working on. AP Associated Press:

Questions, Answers About Housing Crisis

By TOM RAUM – Apr 12, 2008

WASHINGTON (AP) — The Bush administration, Congress and the Federal Reserve are moving on separate tracks to calm troubled housing and financial markets and to help distressed borrowers. The three presidential candidates have weighed in, too.

Some questions and answers on the crisis, what has been done so far and the additional help that may be on the way.

Q: How did things get so bad?

A: Tumbling house prices have left many borrowers owing more on their homes than the homes are worth. With little or no home equity, these borrowers cannot refinance. That means higher payments for people with adjustable-rate mortgages. Among those who are facing foreclosure or who have lost their homes are many borrowers who had questionable credit histories and who obtained risky subprime loans.

Rising defaults have contributed to a credit squeeze that has spread throughout the financial system. That has made it harder on first-time home buyers and people seeking to refinance. It also has affected a range of financial transactions from business borrowing to student loans.

Q. What is the government doing to help? READ ON.......

Interesting Insights From NuWireInvestor.com.......

The $7,000 credit makes foreclosures more affordable as long as investors are willing to use the home as a principal residence for two years. Once those two years are up, investors could sell or rent the property for a profit. The other positive effect that this credit could potentially have is on the market itself. Foreclosures drag down the values of other homes in the vicinity, but with this incentive in place, it is likely that more buyers will purchase foreclosed properties. This, in turn, could raise the values of other homes in the area. Investors with existing real estate investments in areas devalued by foreclosures could stand to benefit as a result. READ THE FULL ARTICLE....

brian@tracyhomes.com