Sunset on Housing? No Time Real Soon...

...and interest rates and housing prices are rising!

The American Dream..."Baseball, Hot Dogs, Apple Pie and..."

Work hard, and have a family.  The government and banks will help you buy a home that's affordable.  Live a good wholesome life, retire and leave your debt-free home to your kids. 

The American Nightmare...

Work hard, and have a family.  Buy a home you may not be able to afford, then have your wages drop or worse - lose your job, and lose your home!  Then realize you will have little or nothing left to give to your kids when you're gone.

The tax law subsidizing home ownership has and does help us have and enjoy the American Dream, the 'Apple Pie'.  Now, some say we've had too much pie, that it costs too much, it 'makes us fat' or worse, it kills us...

Recent propsals to remove ingredients from our Great Americal Apple Pie Recipe would result in loss of a fixed rate mortgage and removal of the IRS tax deduction of mortgage interest and real estate taxes on your primary residence..both are no better than a plain baloney sandwich!

The Obama administration released a proposal this past Friday that would make major changes to the U.S. housing finance system; restructuring it to reduce its dependence on federal subsidies.  Fannie Mae, Freddie Mac, and the Federal Housing Administration currently finance more than 90% of mortgages. 

The plan is to slowly put Fannie and Freddie out of business by gradually reducing the value of the loans they can guarantee and raising the prices they charge lenders. Plans will also require larger down payments from borrowers. The Treasury secretary, Timmothy F. Geithner, has indicated he expects these changes to take 5-7 years to fully implement, stressing that the housing market will dictate how slowly or quickly the agencies close.

So do we have to dream a new dream?  Go on this kind of fiscal diet?  Will we ever eat Great American Apple Pie again? 

Don't worry!  Home ownership has been and should be the engine that helps drives this country.  History has shown that in the long run, property values increase. 

Housing, like many other businesses, is cyclical- and despite the fact that there have been some bad patches,  no one should change this system without either coming up with an alternative plan, or make changes over a long period of time and include some protections for certain situations/owners.  If not, housing will devalue once again, and this time, there will be many who will be "under water" who would not have been of these changes dp come about.  At best they may have to change their lifestyle, be locked into staying in their homes that they cannot afford and worse yet, they could lose their homes.  

We do not want to see people on the street trying to find the Great American "Apple Pie" that is no longer available to any of  us.

Here is more of what may be coming:

New York Time - Shockwaves on the housing market?  

FORTUNE - Earthquake, are we really capable of handling this change to the mortgage industry?