November 19, 2011


Six Ideas to Revive Housing that Congress Might Actually Support (Stan Humphries, 11/18/11, Forbes)

Go bigger on refinancing Fannie/Freddie mortgages. In a speech in Las Vegas on October 24, President Obama promised that the Federal Housing Finance Agency would prod banks to give homeowners who are under water with their Fannie and Freddie mortgages an opportunity to refinance. I don't object to the President's plan. I'm just afraid it doesn't go far enough. Instead of helping only one million homeowners refinance their homes, we should try to help out the 16.5 million homeowners who are under water with their mortgages.

Columbia University professor Christopher Mayer proposes that the government consider giving homeowners who are current on their mortgages permission to refinance, regardless of their credit score. [...]

Grant visas to immigrants who buy U.S. homes. We've got an excess supply of homes in this country right now and not enough people who want to buy them. But we've got plenty of foreigners who'd love to get in on U.S. real estate, especially since home values are back to mid-2003 levels (and even worse in some markets). It's a match made in heaven. Senators Schumer (D-NY) and Lee (R-UT) have proposed legislation along these lines already. Let's pass it. [...]

Allow people to set aside a portion of their retirement funds for down payments. The Progressive Policy Institute has championed a concept they call HomeK, under which individuals can set aside up to half of their contributions to existing retirement accounts into a housing-specific subaccount. The money in this subaccount could then be used for a one-time disbursement toward a down payment on a first-time home loan used to buy a primary residence (up to the local loan limit for an FHA-financed mortgage). Unlike withdrawals for home purchases from current retirement plans, withdrawals from this housing subaccount would be tax-free for lower-income buyers and at steeply reduced tax rates for middle-class buyers.

Posted by at November 19, 2011 7:44 AM

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