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House Approves $15 Billion for House Flipping

Yesterday the US House of Representatives passed a bill that would give states $15 billion to flip houses! The funding, opposed by most Republicans, will grant loans to areas hardest hit by foreclosures, and allow people to buy and fix up homes.

The idea is to save the most at risk areas from turning into ghost towns, or rundown neighborhoods susceptible to crime.

President Bush plans to make sure the flipping bill flops. Bush will whip out the veto, because he opposes the Democrats general approach to the housing crisis, as well as this $15 billion specifically. He says that the money rewards lenders who brought on the crisis, and would backfire by offering them an incentive to foreclose.

Do you think the bill, straight out of the HGTV playbook, will help neighborhoods plagued with abandoned and foreclosed homes recover from the brink of destitute? Or is the fix-up bill a misguided quick fix?

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freegracefrom freegracefrom 9 years
Whoa, that would explain why our house (currently on the market) suddenly started getting a lot of attention.
UnDave35 UnDave35 9 years
They may not have the experience, but experience is something you get by going through something. Too many people purchased homes that they couldn't afford, and chose to get around that by using the interest only loans. I have no sympathy for them. If you can't afford the payment on a traditional mortgage, then it's too big a house, for now. Get a better job, make more money, save it, and then go for the bigger house in a few years...
I don't think people who are/were buying properties out of greed, rather than for a family home, should be bailed out. I think a lot of people were duped by their mortgage companies. You used to be able to depend on them to refuse to put you into a home you were not going to be able to afford. There were a lot of young families, or first time buyers, purchasing homes throughout this. They don't have the experience to make sure they're not being screwed around. Also, just an idea, but if these neighborhoods are going to be ghosttowns, bulldoze them! Then, maybe some trees and grasslands can grow back!
lickety-split lickety-split 9 years
houses aren't selling in our neighborhood, and there are pleanty for sale. if no one can qualify for the loans needed to buy a house it doesn't matter how nice the house is. there are 4 bank owned homes w/ 3 blocks of our house and all are listed under market value. a friend has had her house on the market for 18 months. there are too many bank owned properties in her neighborhood to count. these are all beautiful homes with no repairs needed. i don't see this as being helpful.
UnDave35 UnDave35 9 years
The money is still going towards "will grant loans to areas hardest hit by foreclosures, and allow people to buy and fix up homes. I read that as the local governments will be able to give low interst loans to people so they can attempt to flip houses. I think one of the best reasons I can see use to support my case is the South Carolina team from the show "Flip This House". They had 5 houses in foreclosure proceedings last month, yet they are supposedly one of the best. While I am sure that some people will have success with their flips, I don't see the housing market as being able to support a sudden influx of flippers...
vasanta vasanta 9 years
everyone is to blame, the appraisers, the buyers who had no business getting into this crazy situation. i mean come on, no down payment? and especially the mortgage companies who were greedy beyond all greediness. they are least deserving of any bailout. but we cant abandon these neighborhoods, and destroy the lives and investments of the other homeowners who did everything right but now are made to suffer as their streets are empty.
stephley stephley 9 years
If I'm reading the Washington Post explanation right, the flipping money goes to communities, to keep hard hit neighborhoods from falling apart - so it's not going to individuals who could screw up a flip. That's not to say corrupt local politicians won't use the money to their advantage, but that's always a possibility. But part of the package does help lenders and individuals try and stave off some foreclosures and that's important, unless you figure a surge in the homeless population will help the country. You can't blame the mortgage crisis solely on individuals - they couldn't have gotten the loans without unscrupulous lenders. And these loans were pretty aggressively marketed. For this crisis to impact financial markets in other countries means there were a lot of banks and institutions that thought they were going to make a killing.
UnDave35 UnDave35 9 years
Great. Our country is going to finance something that hasn't yet hit bottom, so more people can try the RISKY business of flipping house, and more people can get foreclosed on..... Is our government stuck on stupid?
LibertySugar LibertySugar 9 years
But what about the risk of these neighborhoods turning into abandoned and dangerous places? Do we have to swallow our frustration with the lenders to prevent more crime and destitute, which negatively impact average citizens? I feel like there are (at least) two sides to this complicated issue, and it's tough to figure out where to stand.
hypnoticmix hypnoticmix 9 years
I agree that we shouldn't reward reckless investments. However, I just think it's funny how the gov. wasn't complaining much when the investments where rolling in, in fact they were encouraging the investments. In my eldest sisters case her husband was forced to retire early due to health issues and as a result of his health issues they were forced to let go the home. It was very sad because it was their dream home that they worked hard for twenty five years to buy and now they live with their eldest daughter. I think the bail out should be on a case by case basis and the broad brush approach of the bill is not the answer. I agree with President Bush on this matter.
cine_lover cine_lover 9 years
Be still my heart. I agree with Bush for the first time in a long time. I am with Skinny on this one!
bellaressa bellaressa 9 years
Who is buying these flips? When these flippers buy property they are putting their livelihood in jeopardy, if the property sits on the market they are paying their mortgage and the mortgage of the house they are trying to flip. Very risky, especially during this time. People need to realize it takes more than just a desire to be a home owner, it takes work, money, and dependability. I can't believe they dedicated a bill to this; seems they have nothing better to do.
mini_pixie mini_pixie 9 years
I think a better solution to this problem might be to make sure home buyers can get loans that will pay for the house as well as any needed improvements to it. That way the houses will be improved, keeping neighborhoods from devolving into ghost towns or getting totally run down, but they will be purchased by people who want to live there not make a quick buck.
Shopaholichunny Shopaholichunny 9 years
I agree with skinnymarie!
stephley stephley 9 years
I think its a little cynical to focus on the flipping part of the housing rescue package, and not mention that the House also passed a measure that would create a $300-Billion dollar mortgage insurance fund. It's a start.
KrisSugar KrisSugar 9 years
it seems like you can flip all the houses you want, but if no one can afford to buy it after you flip it, well there isn't much point.
SkinnyMarie SkinnyMarie 9 years
OMG I think I agree with our president for the first time in almost 8 years! man... I agree that people put themselves into this on their own. And to give money to people who are flipping is the wrong person to give it to, because they are just trying to profit off of the house by making drastic-minuscule improvements. That is what caused the bubble in the first place, and now the bubble has popped and those people are SOOL.
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