Invest in the Housing Market So as to Ease the Foreclosure Crisis
Photo by Renjith Krishnan
In September both housing prices and sales figure dropped indicating that the market is continuing to ail. There is a suggestion from the Congress to bring about a change. Two senators, Mike Lee (Republican/ Utah) and Charles Schumer (Democrat/ New York) have sponsored a bill on 20th October that would give tourist visas to foreign purchasers of residences. They would have to pay cash and not buy the house through any mortgage loan.
The anticipation behind this move is that it would give an incentive to the rich living overseas to invest their money in the housing market in USA. The law would expedite visa formalities of the tourists. Longer stays would be permitted for the senior citizens of Canada. The overseas buyers would be allowed to stay a minimum of six months in USA.
The bill, if passed into law would be akin to an invitation sent out to exclusive people across the globe in the hope that it would ease the foreclosure crisis. Brian Phillips of Lee’s Communications (director) said, “If you are a person of means and you can live in the United States for more than six months (out) of the year, you can write a cash cheque to a homeowner … in excess of $500,000, then we certainly welcome that”.
The bill stipulates that the purchaser has to spend a minimum of $250,000 on one residence where he or she is expected to stay. The balance amount from $500,000 could be spent to buy other properties that could be rented out.
Phillips explained that there are some who cannot sell off their residences and there are some here in USA who fail to purchase paying that amount. Thus the attempt is to link those who looking for buyers with the right kind of amount with those ready to buy.
In brief – this invitation is only for those who have the required cash ready in their pockets; it is assumed that with that kind of money they will buy not only the house but the accessories that go with it like carpets, furniture etc. The purchasers would be given tourist visas but not work visas. There is no chance of foreclosure as they would buy the units outright without going through the loan process.
There is broad support for the bill. It has been endorsed by Warren Buffet, the billionaire. In an interview conducted by Charlie Rose, Buffett said that this was a good way of clearing the glut the in the housing market.
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