Finally a Government Bailout for Real Estate Investors!

Despite being blamed for the housing bubble it has been clear that the government and banks have been looking for the aid of real estate investing professionals to bail the nation out of the economic slump but it has taken until now for any support to come to the aid of investors. What’s the deal?

It has now been announced that changes to the HAMP (Home Affordable Modification Program) will enable investors to start receiving up to 4 federally subsidized loan workouts, beginning in around 60 days. Basically this means loan mods, cutting mortgage rates, lower payments and principal reductions for real estate investors caught out by the bust. This includes those speculative investors and real estate investing companies who took out low down payment loans with high rates and couldn’t flip them or make ends meet.

With 45% of mortgages in top foreclosure states taken out by investors and over 30% of purchases made by those in real estate investing in 2006 alone this is a huge pool of property owners who could potentially be helped. Plus, that doesn’t count all the multiple ‘owner-occupied’ purchases and loans that were made which were actually investments.

While these modifications are really aimed at helping buy and hold investors who will continue to rent them or who will make plans to find tenants for them, obviously the more wealth preserved and fewer homes in foreclosures, the stronger the overall economy will remain and grow.

How does this really help those getting into real estate investing today or those who lost their investment properties already?

The great news for those getting back into real estate or getting involved in real estate investing for the first time is that this signals strong motivation and willingness on the behalf of the government at all levels and lenders to offer incentives for those who will take on distressed properties and rent them out or at least maintain them. Use this to build in even better profits.