The Senate just announce passage of a Mortgage Rescue Bill that should help tens of thousands of Las Vegas homeowners avoid a Las Vegas foreclosure and get more affordable, safer loans – but, the bill must pass muster with the House of Representatives next.
We think this is potentially good news for consumers and our overall market, as the plan lets Las Vegas Homeowners dealing with the stress of mortgage payments they can’t handle or afford, keep their homes and get more affordable mortgages backed by the Federal Housing Authority (FHA).
Banks that agree to this plan could take substantial losses on those distressed loans but would avoid dealing with Foreclosures and would recover some of their money. It’s a win win for all parties; i.e. Las Vegas Homeowners, banks and the overall market.
The new program will let the FHA insure as much as $300 Million in new mortgages, assisting an estimated 400,000 homeowners on a national basis to avoid foreclosure. The measure will also help to modernize the FHA and would create a new regulator and tighter controls on Fannie Mae and Freddie Mac. The Senate wants to cap loans at a dollar amount of $625,000. and House slightly higher at $730,000. It would also provide a $14.5 Billion in housing tax breaks, including a credit of $8,000. for first time home buyers.
There’s an old Irish saying, “the Devil is in the Details” which is certainly applicable – we don’t know the exact specifications of the final Bill and how it will impact our Las Vegas foreclosure market in a detailed manner yet.
But, we believe the overall impact on the market will be good for all. Here’s why: this sweeping legislation will help to reduce the numbers of Foreclosures for thousands or tens of thousands of Las Vegas Homeowners, which will in turn lower the inventory of unsold foreclosed homes, which will help to stabilize pricing and lower our overall inventory of homes on the market to more normal market conditions of 4-6 months of unsold inventory (approx), versus 8-12 months (approx), where it is now.
Most importantly, we believe this legislation will help tens of thousands of Las Vegas Homeowners save their homes and avoid all of the associated heart rendering problems that occur when a family loses a home to foreclosure! If you concur with our analysis, we urge you to support this legislation and let your Senator and Congressmen know how important it is to not only Las Vegas, but our country on a national basis!
