Increase of Federal Tax Credits for housing? – The Business Roundtable submits their recommendations.

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On April 1st, 2009 the Business Roundtable Housing Working Group was formed. It is comprised of CEO’s of top companies such as Whirlpool, Honeywell and Owens Corning. Its main objective is to make recommendations to Congress and the current Administration, on how to stabilize markets – In particular the housing and financial markets. One June 11th, 2009 The Housing Working Group made a series of recommendations that will be outlined in this blog that they recommend that would stabilize these two deteriorating markets.

Tax Credits – The Business Roundtable’s primary recommendation is to increase the Federal tax credit that home buyers are eligible for. Currently, only “first time” home buyers are eligible for the $8,000.00 Federal tax credit. This recommendation calls for the tax credit to be increased to $15,000.00, not only will it be increased, but it will also reach out to all home buyers regardless of their status as long as it is for a purchase of their primary residence, regardless of their income.

Interest Rates – In addition to a higher Federal tax credit, The Housing Working Group also calls for the Federal Reserve to keep mortgage interest rates below 5% as much as possible for the next 1 year. The theory behind this is that manipulating the interest rate and keeping them low will spawn more spending in the housing markets as well as for lending institutions to be able to lend money at a relatively low interest rate.

Default Foreclosure Rates – Due to the increasing number of borrowers falling into foreclosure the Business Roundtable has also made a suggestion to Congress to “conduct a thorough review of current foreclosure mitigation and loan modification programs”. Congress has laid out a new mathematical formula for lenders to use to determine whether or not a borrower can qualify for a loan re-modification program. Currently, a borrower who may qualify for this program has already vacated their house leaving no other option for foreclosure due to the back-log of foreclosures needed to be processed.

Other recommendations fall in line with what many other activists and congressional members have been pushing for, such as reformed lending practices that provide transparency and accountability throughout.

For more information about the Business Roundtable Housing Working Group please visit their website at: www.businessroundtable.org

Check back with us next week for another blog installment about South Florida foreclosures as well as local and national real estate news.