February 9th 2008
The Congress Passed The Real Estate Economic Stimulus Bill Today!
President Bush is still searching for an improvement of his legacy…this may be IT!
Today the Congress sent President Bush the real estate economic stimulus package. This is BIG! This morning the Realtors Marketing Association had our State legislator, Guy Houston, share with us his views of not only the importance of this bill, but several other very 
important legislative measures that need to be passed as soon as possible for Californians. I will give you more information about his comments later in this article. Below is the email I received from the California Association of Realtors regarding the stimulus package passed today.
The Senate version expands rebate checks for seniors and disabled veterans and includes the same increases to the conforming loan limits for both GSE and FHA found in the House stimulus package. The House just passed the Senate version of the bill and it will now be sent to the White House. The President is expected to sign the legislation by the end of the week, ahead of the Congressional self-appointed deadline of February 15th. The increase in the conforming loan limits will last through 2008, but C.A.R. and NAR continue to lobby for FHA and GSE reform, making these increases permanent.
The U.S. House of Representatives passed a stimulus package last week that raised the FHA and conforming loan limits to as high as $729,750 in high-cost areas. By increasing the loan limits, borrowers will see immediate relief with new liquidity in the mortgage market and the nation will see an additional 300,000 home sales. Research shows that an increase in the FHA limit would enable an additional 138,000 Americans to purchase homes, and 200,000 families to refinance their homes safely and affordably.
Additionally, raising Fannie Mae and Freddie Mac’s (GSEs) conforming loan limit will provide immediate relief to borrowers and alleviate downward pressure on current housing markets. For instance, increasing the GSE loan limit could result in more than 300,000 additional home sales and strengthen current home prices by 2-3%.
The critical role that GSEs play in providing liquidity to the mortgage market has never been more evident than it is today. The national subprime meltdown has had a dramatic impact on both the cost and availability of mortgages in many markets. Since August 2007, the interest rates for jumbo borrowers have been more than 1 percentage point higher than conforming loans, which can cost homeowners up to $400 month in higher interest payments.
Guy Houston’s additional comments today focused on the bill he is sponsoring in the California legislature that will allow consumers to more easily deal with their lenders as they work through the real mortgage crisis that is actually ruining families throughout the State. He also addressed the bill that he sponsored that requires builders that pile on additional fees to new homes to have those fees be spent within the community where they are charged. The California Association of Realtors was not pleased with his bill because they viewed it as a tax. But, today he again explained that it is the first time that the State has mandated developers to spend any money they collect from these fees within the community collected from. Until this bill was passed the developer could spend that money anywhere they wanted. The Realtors Marketing Association has Mr. Houston speak each year giving us an update on what is happening with legislation that impacts real estate. He again did a great job of keeping all of us informed today.
I will keep you posted as to any new developments with any legislative issues that impact our East Bay real estate community. Until next time…
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