Housing Groups Rally for Anti-Foreclosure Measures in Obama’s Term

by Peter Vernon on Stop Foreclosures

At least two groups are presently pushing for new foreclosure prevention plans when Barrack Obama steps into office.

The National Association of Home Realtors organized 80 builders, mostly from small private companies, to meet with lawmakers involved in committees in charge of the president-elect’s economic rescue plan. The bailout program is estimated to cost nearly $800 billion in two years.

The builders are pushing for massive government intervention to increase home sales and prevent future foreclosures. Their proposal includes a package of subsidies to adjust mortgage rate to below 3 percent for the first half of 2009, and a tax credit reaching $22,000 for buying homes.

Meanwhile, the National Association of Realtors had its members send over 300,000 letters to lawmakers. The realtors are rallying for a more modest proposal which aims to provide a tax credit of $7,500 for home purchases.

However, housing aid is expected to be part of a separate bill and not Obama’s economic stimulus package. The bill is expected to outline a new plan for the remaining $350 billion economic bailout money during the Bush administration.

Obama in an interview with CNBC said that foreclosure prevention would be the best solution for declining home values. He also said that a new foreclosure plan is in the works and is going to be unveiled within the next two months. The plan is expected to be modeled after Federal Deposit Insurance Corporation Chairman Sheila Bair’s program which gives lenders monetary incentives to modify loans. The FDIC plan is estimated to prevent 1.5 million foreclosures.

Last September, one in 10 US homeowners were in stages of foreclosure or were at least a month behind on their mortgage payments. Over 8 million foreclosures more are predicted to take place in the next four years.

Government anti-foreclosure plans have been criticized by various sectors. A particularly contented issue by lenders was the Democrat-led initiative to allow bankruptcy judges to modify loans or interest rates of primary home loans.