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Buying, selling or refi? New laws will help

Late last year, the federal government started responding legislatively to the upheaval in the housing market. Some argue that the resulting laws have been too little; others feel they are too late. My guess is that with the upcoming election, we have only just begun to see how the federal government will intervene in this thing before it’s all over. Whether or not you agree with the direction of the various measures, it makes sense as a smart homeowner to understand how they may impact your situation.

These federal housing bills go through a vast number of revisions between their proposal and their adoption, so from the time you first hear of a bill to the time it is passed, it is liable to undergo significant changes. Don’t write off a bill as irrelevant to your situation just because you couldn’t see how it might impact you the first time you read about it.
Also, even after they are signed into law, these bills can take months to implement. For example, from the time the president signed the bill increasing the Federal Housing Administration’s (FHA’s) loan limits to the time a mortgage broker could actually obtain an FHA loan for you at the higher limits was probably six weeks or so. The more extreme change a particular law represents from the status quo operations of the federal housing machinery and the mortgage industry, the longer it will take for the infrastructure to catch up to the law so that you can actually take advantage of the new law.

Finally, real estate is a dichotomous market, so usually, we think of something that is good for buyers as bad for sellers and current homeowners, and vice versa. Many of the recently passed federal housing laws have provisions that incent people to buy, with the idea that stimulating home-buying will help homeowners sell their homes and reduce the backlogged inventory of homes for sale that are sitting on the market in many areas. The end result? Boosting the demand for homes will bolster the value of homes. That is, laws that help buyers buy may have an indirect effect of maintaining and, eventually, increasing the value of your home, but it will take a while to see any such impact.

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