For two years the political election campaign dragged on – often through slug mud – as the real estate market simultaneously continued its record-breaking fall. But with the pivotal elections behind us the nation’s housing and mortgage situation may be primed for improvement.

One plan that Obama talked about during his campaign was a proposal to place a moratorium on foreclosures. While this may only offer temporary relief, it is certainly a welcome reprieve to those homeowners who face imminent loss of their homes, and it will also help to shore up home prices across the board. The foreclosure freeze is not a new idea, and a 90-day freeze on foreclosures was recently called for by California Governor Arnold Schwarzenegger – a Republican – who insists that lenders who participate in the freeze will be rewarded and that homeowners will see direct benefits.

But perhaps a more sustainable approach – and one that helps both homeowners and lenders – is to rework the fundamental terms and rates of mortgages through various loan modification strategies. Under the new White House administration there will likely be some powerful moves in this direction.

Sheila Bair, for example – who is the current head of the FDIC – is one of three or four prime candidates who are on a short list of potential choices to take the helm at the United States Treasury when Obama transitions to power. She also has an outstanding track record for managing the toxic mortgage assets of the failed banks that the FDIC has been forced to take over, and has long been the most vocal and passionate advocate of drastic mortgage rewrites.

A full year ago – while the economy was still in relatively good shape – Bair was already calling on banks and mortgage lenders to lower interest rates, cut principal balances, and take a much more direct and proactive approach to working with borrowers. Most of the bankers ignored her forward-thinking advice, and now they regret it. But under an Obama administration they may be forced to take a more active role in helping the housing market, while they also benefit from financial support provided through the existing $700 billion economic rescue plan.

Although Bair is relatively unknown to most Americans, investment wizard Warren Buffett – who is a respected member of Obama’s economic advisory team – has great admiration for her and has referred to her as a genius who is doing outstanding work to resolve problems at debt-plagued mortgage institutions. She may, in fact, be of more service to the nation by remaining in her position as FDIC chair – but regardless of whether Obama broadens her scope of responsibilities or not, she will most likely remain a valued and important asset to his administration. She also happens to be a Republican, so giving her a prominent and empowered role could help Obama win more bipartisan support for new housing market initiatives.

One way to predict the direction of political policy changes is to watch and see how industry reacts. Whenever major companies suddenly takes the initiative – after months of inertia, reluctance, and foot dragging – it usually means that they are trying to behave in such a way that they do not invite unwanted mandatory regulations. In that regard Citigroup – maybe in anticipation of increased regulatory pressure from the new administration – announced a $20 billion plan to keep borrowers in their homes by reworking their mortgages with more leniency. Other financial institutions like J.P. Morgan Chase are also getting much more aggressive about helping homeowners – whereas they seemed slow and hesitant to do drastic modifications before the election.

The Fed also unveiled a big loan modification plan in November, and it calls for changing the terms of Fannie Mae and Freddie Mac mortgages with the goal of bringing payments below 38 percent of a homeowner’s monthly household income. Interest rates could be lowered for five years and then – after the real estate market is once again stable – raised to a predetermined level. Loan terms might also be lengthened to 40 years, which would also bring down monthly payments.

Meanwhile the National Association of Realtors (NAR) is actively lobbying the government to artificially lower mortgage rates by doing a widespread buy-down, which involves purchasing loan points on behalf of people buying homes. That could stimulate sales by as much as four percent.

During his campaign, Obama told the NAR of several specific ideas to aid the real estate market. He said that he would like to see a universal mortgage interest tax credit for families and that he also wanted to create a $10 billion foreclosure prevention fund to help homeowners avoid losing their homes. He also supports tougher laws to prevent mortgage fraud – including a simplified, standardized metric for calculating the costs of a home mortgage.

Time will tell, but many experts believe that the return to real estate prosperity will be sooner, not later, under America’s new and apparently fully energized administration.

Whether you’re buying, selling, or refinancing, contact the professionals at www.GayRealEstate.com. Or call toll-free 1-888-420-MOVE (6683). The entire network is fully dedicated to the GLBT community.

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Jeffery Hammerberg is Founder and President of Gay Real Estate, Inc. – the nation’s largest group of companies connecting gay & lesbian home buyers and sellers to gay, lesbian and gay friendly real estate agents. Since 1997, Hammerberg has created a virtual real estate marketplace for the LGBT community.

Photo credit: www.GayRealEstate.com.