Changes in Real Estate Laws

Debate began yesterday in the House of Representatives on proposed new real estate law legislation intended to help first time home buyers, owners and the battered housing industry, sponsored by Rep. Barney Frank, D. Mass.

This package would enable the FHA (Federal Housing Administration) to insure 300 billion dollars in new loans over four years if lenders reduce mortgage principle on loans to a maximum of 85% of the appraised value of the homes in danger of foreclosure. The government in turn would cover the remaining liability of FHA-refinanced loans in default. The estimates to cover the 500,000 eligible borrowers may cost 2.7 billion over 5 years, with 1.7 billion being billed to taxpayers.

Tighter rules concerning oversight of the two GSE's Fannie Mae and Freddie Mac, & "Modernization" of the FHA have been added to the measure to garner bipartisan support, but the white house has threatened to veto the bill on the grounds that the measure’s recent additions are emblematic at best, and could undermine the FHA's ability to cover future debts, while burdening taxpayers with undue risk.

Ben Bernanke provided support to the bill in a speech delivered Monday suggesting that a deliberate loss of principle in concert with refinancing through FHA may be the best solution.

Political analysts see this gesture by the White house as an attempt to gain more control during the bill's developmental phase, aiming to influence the final version of the measure. An outright veto of the measure would be considered negative during the next presidential election for swing states such as Florida & Ohio, whose local economies have been ravaged by the housing crisis.

California Real Estate Laws and Buying a House

As California home buyers continue to feel the weight of the real estate market fluctuation then comes the cash buyers taking properties. Many of these are local investors looking to flip houses and sell to the new buyers.

Also there is the influx of foreign investors buying apartments, rental properties and single family rental homes. Many foreigners with a wealthy sum can afford to throw money at the sellers without consideration of price. This is the North American real-estate trend. Furthermore, it’s no secret that the real estate laws in California differentiate slightly from those in other nearby states.