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Investors Eligible For Refinancing Through Obama's Housing Plan

A couple of days ago I wrote a post about how Obama had drawn a line in the sand between investors and homeowners when it comes to housing and personal responsibility.  Apparently that line has become blurred, and that's a good thing.  Just because a person chose to make an investment in real estate, does not make them any less responsible than a person that bought a home they could not afford. 

Now clearly there can be a debate as to whether or not the government should be offering these types of refinances for anybody, and I  can think of a couple of reasons why they shouldn't, but if they are going to, they need to include everybody.

In order to prevent future home value declines, which is in most American's (67.5%) and banks' interest, investment real estate needs to be part of the solution.  According to the U.S. Census Bureau, nearly 42% of the houses in the country are either rented, for rent, vacant, or are second homes.

CNBC's Diana Olick is reporting that those that invested in real estate, not just homeowners, will also be eligible for refinancing through Obama's housing plan as long as the current mortgage does not exceed more than 105% of the current value of the property.  The benefit to the broader housing market is that this action could prevent additional foreclosures which continue to drive down surrounding property values as well as banks' balance sheets.

Stabilizing the housing market is a two step process, not only is it helpful for banks to provide loan modifications and for the government to make refinancing available so as to limit foreclosures, but more importantly, we need to increase demand in order to absorb the excess inventory that is currently sitting on the market.  And yes, investment real estate needs to be a part of that solution too President Obama.

 

Comment balloon 0 commentsKevin Robinson • March 18 2009 10:21AM
Investors Eligible For Refinancing Through Obama's Housing Plan
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