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5 plans to save the housing market
A number of economists and politicians have issued housing plans in the last few weeks. Here's a round-up of the ideas.
As the unemployment rate stays stubbornly high and housing remains mired in recession, several proposals have come down the pike lately on how to jumpstart a recovery in both areas. Here's a look at a few of the recent plans:
(Click on each plan name for more info)
- Homestead: Act 2 - Proposed by U.S. Rep. Gary Ackerman, D-N.Y., this plan is designed to encourage homeownership by offering subsidies for those who want to buy single-family homes to live in them and tax exemptions for investors in rental properties.
- The Huntsman plan - Introduced as part of presidential candidate and former Utah Gov. Jon Huntsman's jobs plan yesterday, this proposal calls for privatizing Fannie Mae and Freddie Mac and scaling back homeownership subsidies. The current programs are stopping a "natural stabilization" of the market, Huntsman says.
- The Spitzer plan - Former New York Gov. Eliot Spitzer (along with others) is calling for the administration to force banks and the GSEs to write down mortgages for underwater borrowers to the current market value of the home, with the banks sharing in any upside profits.
- The Obama administration's plan - It's not clear at this point exactly what the administration is planning to do on housing, although it will apparently be part of the President's job creation program that he will introduce to a joint session of Congress next week. Most indications are that it will at least include some form of an expanded refinancing program for underwater borrowers.
- The Foreclosure plan - Voiced by a number of economists, this one's rather simple: Just stop propping up the market and push foreclosures through as quickly as possible to get through the crisis.
(Presidential candidate and former Massachusetts Gov. Mitt Romney is also introducing his jobs program next week, but there's no word yet on whether or not he'll say anything about housing.)