Big Week Ahead: $15,000 Tax Credit and Foreclosure Relief Plan
Today, President Barack Obama (right) will address the American public, no doubt to lay out his case for two mammoth billion-dollar plans that are designated to help real estate: the economic stimulus package and the bank bailout. Within each plan are pieces designated to help jump-start real estate:
$15,000 tax credit
Interest around the $15,000 tax credit has reached heightened proportions in the past week as troubled homeowners and homebuyers want answers to this critical housing amendment that is part of the economic stimulus package (American Recovery and Reinvestment Act of 2009). So far, we can only speculate how this shapes up until the bill becomes official. On Tuesday, the Senate is expected to pass it by a squeaker: 61 votes (only 60 are needed). Then, the bill will go before the House and Senate committees for fine-tuning, then to Obama’s desk to be signed — hopefully by Feb. 16.
Foreclosure relief
Running parallel to the economic stimulus package is work being done to slow down foreclosures. This week, Treasury Secretary Timothy Geithner (right) is expected to provide details for how the $350 billion remaining in the financial industry bailout package will be used. (This is the “other half” of the $700 billion TARP fund — Troubled Asset Relief Program — that is being given to the banks). House Financial Services Committee Chairman Barney Frank said President Obama is pledging to spend $50 to $100 billion directly on foreclosure relief. This time around, the Obama administration will make provisions that banks lend more and help deal with foreclosure in a reasonable way or “they’re not going to get the money,” Frank said. According to CNN, Obama’s loan modification plan calls for:
- Making monthly payments more affordable by reducing interest rates
- Lengthening loan terms or deferring principal
- Reduce payments to no more than 31% of a borrower’s monthly income.
So far, more than 10,000 delinquent loans have been modified, and offers have been made to another 20,000 borrowers.
Read more in Zillow Advice about:
Will the $15000 tax credit apply to a second home?
Questions on $15000 tax credit and existing loan applications
How does the tax credit help people in ’09 if they can’t claim it until ’10 when filing?
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