by Nancy Osborne, COO of ERATE®
June 21, 2008 - A new housing secretary, Steven Preston, has been appointed by the Bush administration. Preston, who had previously headed up the Small Business Administration (or SBA), will become the White House's new front man on the battle lines of both the housing and credit crisis. Preston is also likely to become the chief liaison and negotiator between the White House and Congress on all new legislative matters in response to the crises. The first matter on Mr. Preston's agenda could likely relate to the recently proposed Federal Housing Administration (FHA) legislation which would allow distressed homeowners to refinance $300 billion in FHA insured mortgages. New options are being floated in Washington as to how to combat the slowdown which is transitioning into the weakest economy since the 2001 recession. Washington is open to a number of ideas but would first like to see the results of the $168 billion stimulus plan passed in February, as taxpayer rebate checks began reaching individual taxpayers just last month, before proceeding with any new measures. Thus far the Treasury has distributed rebate checks totaling approximately $57 billion, amounting to slightly over half the payments planned to be distributed this year.
This new housing appointment comes in the backdrop of more bad economic news as the unemployment rate in the month of May rose an unexpected half a percent. Declining job opportunities can now be added to the list of compounding economic problems facing the U.S., just as rising fuel and food costs have become a serious hardship for Americans on top of decreasing home equity as a consequence of the housing crisis. However the disappointing employment report for May underscores an economy that is already progressively weakening. Analysts remain uncertain as to whether or not a recession has begun in terms of a technical definition, however homeowners who have watched their net worth fall, along with their home's value and are also experiencing a drop in their discretionary income as food and fuel costs continue to demand an ever larger share of their paycheck, need no confirmation that indeed a consumer recession has begun.
Nancy Osborne has had experience in the mortgage business for over 20 years and is a founder of both ERATE, where she is currently the COO and Progressive Capital Funding, where she served as President. She has held real estate licenses in several states and has received both the national Certified Mortgage Consultant and Certified Residential Mortgage Specialist designations. Ms. Osborne is also a primary contributing writer and content developer for ERATE.
"I am addicted to Bloomberg TV" says Nancy.
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