The house passed the bailout legislation today. The vote for passage of the Senate-amended bill was 263 to 171.
Remember that the Dow dropped over 700 points the last time they couldn’t get this bill passed and so today’s passage marks a possible turnaround for the economic slowdown we have been seeing.
Some of the major benefits we expect to start to see once implemented include:
- Once the Government purchases the mortgages from Banks they will have the flexibility that the banks DO NOT to modify loans which will help stem the surging foreclosures that we have been experiencing.
- Confidence will slowly return to wall street which will lead to lower 30 year interest rates spurring more home purchases
- Banks will have more liquidity and hopefully will be able to approve more credit worthy borrowers for new loans also decreasing the glut of housing on the market today.
These three major points will all with the underlying problems that at dragging down the economy. That is that there are too many homes available on the market and not enough qualified buyers to purchase them up. The rising foreclosure both adds to this as well as hurts the banks and their ability to lend.
We will keep you updated with the actual results as they become live as the bill goes into effect. Watch next week as we delve into the other major legislation that recently went into effect regarding the changes to FHA and the new HOPE initiative!