Obama’s State of the Union and What it means for Real Estate

Everyone has been talking about the State of Union delivered on Tuesday by President Obama. It’s hard not to. It doesn’t even seem to matter if you are a democrat or republican or libertarian or none of the above. And maybe it’s just me but it seems like people are paying more attention to politics these days. And I wanted to use this post to talk about the State of the Union address and what it means for the real estate industry.

There is a consensus that housing and home ownership lie at the base of American values and will play an important role over the next 9 months leading up to the election. It’s also important to note that history has shown that recovery in real estate means economic recovery. So it was of no surprise to me that it was a topic he touched on in his address, although little has been said and done regarding real estate in the past few years. Currently there is HARP (Home Affordable Refinance Program) that exists. If you’re not behind on your mortgage payments but have been unable to get traditional refinancing because the value of your home has declined, you may be eligible to refinance through MHA’s Home Affordable Refinance Program (HARP). HARP is designed to help you get a new, more affordable, more stable mortgage. HARP refinance loans require a loan application and underwriting process, and refinance fees will apply.

Many have complained that this program, like so many programs, is bogged down with red tape that make it very very difficult to actually get approval. During November of last year, there were changes made to HARP. One of these was that the HARP 1.0 program allowed borrowers to refinance up to 125% of the current value of the home but the HARP 2.0 will do away with that 125 percent limit. And hopefully will allow more people to actually take advantage of the program but we have yet to see that happen.

“I’m sending this Congress a plan that gives every responsible homeowner the chance to save about $3,000 a year on their mortgage, by refinancing at historically low interest rates. No more red tape,” said President Obama last night. The program would be paid for by a new fee on banks, but details have yet to be announced and until they are, the outlook in Congress is difficult to forecast. Previous attempts by Obama have been made to add more assistance to homeowners and those attempts have been denied by Congress.

I’m hopeful that because of this being an election year, and with people paying more attention to this recovery and what has been done or what hasn’t been done, that we will see more action in 2012. For example, when another program or revisions to existing programs make their way through Congress that people will notice. How great would it be to get the kind of exposure for any bill that SOPA received!? Obama’s State of the Union layed out promises for Real Estate in the coming year and here’s to hoping that they will be achieved!

Here’s a good article on Six Ideas to Revive the Housing Market that Congress Might Actually Support. Check it out here.

by Betsy Ballantyne

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