During the presidential campaign, both candidates ignored the issues about the housing market. They never gave a clear position or statement about real estate. But now that President Obama is back in the White House, here are some predictions on how the administration will handle the situation based on his administration’s previous actions. Although his administration hasn’t released a definite policy the following actions are expected to take place:
Implementation of the Dodd-Frank Act
It’s now expected that the Dodd-Frank Act will be implemented to its full extent. The set of difficult standards will be the normal process when it comes to lending. More rules will be established under this act and they will include higher capital limits for lending. Currently, only a third of the laws under this act have been established.
More opportunities for refinancing
Obama’s administration just recently upgraded the HARP (Home Affordable Refinance Program) which means that a lot of homeowners who were devastated by the economic crash and have poor credit will be allowed to refinance their homes. This move will help stabilize the real estate market by lowering payments on homes and hopefully it will also have a positive effect on the economy. The rules removed limits for loans.
Shared appreciation is a loan adjustment where the borrower is offered a principal reduction with the condition that they will share the home’s appreciation in the future. Although this proposal sounds very practical and would be a win-win deal for every party involved this proposal may still be sidelined.
Interest Deduction on Mortgages
Interest rates for the high income brackets are expected to change. It has always been this administration’s goal to limit the deduction to rich Americans. Romney’s ideas however was to put a cap on the deduction. It would have been an effective way to eliminate mortgage interest deduction for a lot of middle income homeowners.
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