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	Name:	water_watcher -
	Subject:	what a dreamer ... you don't read do you?
	Date:	6/24/2010 6:41:19 PM

First the $8K redistribution of wealth was not a success ... housing prices continued to fall and many would not jump in trying to catch a falling knife. A high percentage of those that did buy, were going to buy anyway due to need, relocation, etc.   Just like the cash for clunker program.

There is a huge difference in people committing to buy a car and if they do finance it is a 3 year commitment. People must have transportation so that will recover faster due to the lower investment and shorter time horizon. Also many car companies had programs if you lose your job you can return the car and owe nothing more.

Buying a home for most people is the single largest investment ... do you buy any investment if you think it may go lower?   I don't. Do you think $8,000 really will impact someones decision on even a modest home purchase in the $200-$300k range when the price could drop another 10%, 20% ?    If someone believed housing prices had bottomed, they would be jumping in head first.

Lastly, nearly 80% of the homes purchased with the $8K credit were backed by Fannie and Freddie ... do you also know they have over $500 billion of loans on their books that are in default one month or more and 11% are over 1 year in default without a payment.   This is a huge problem.   Banks will not take new risks with housing prices falling unless someone has over a 780 credit score and has at least 25% down/equity. Short of that they let the government back the loan through Fannie and Freddie.   A bubble ready to burst for phase two of the housing crisis.

Yet the dems do not even want to require a minimum 5% down for fear it will restrict home ownership to only those that can afford it.   :)