Senate's Bill to Ease Housing Crisis-Will It Work?

Based non ABC News, Senate leaders announced an agreement Wednesday on legislation to ease the slumping housing market and help millions of families threatened by foreclosure.

Here is the highlight of the proposed legislation plan by congress to help housing market:
1. $4 billion in grants to local governments to buy and refurbish foreclosed homes;
2. New authority for states to issue bonds to be used to refinance subprime mortgages;
3. A $7,000 tax credit for people buying new homes or properties in foreclosure.
4. A broader rewrite of the FHA that reduces down payments on FHA-insured loans and raises the dollar limit on mortgages that FHA can insure.

Will this plan save the US housing market? It remains to be seen.
How many properties can $4 billion dollars buy? If we assume that the median price of US houses sold today is $200,000, then, the $4 billion dollars can only buy 200,000. There are about 2 million houses are facing foreclosures. That means this $4 billion dollars can buy about 10% of the foreclosed properties. Will this save the US market? I don't know.

Other important questions we need to ask are:

How many people want to buy homes now even with this $7,000 tax credit?

How many people can get a mortgage loan now with mortgage companies' tighten criteria of lending? If not many people can get a loan, how can they buy their homes?

How many investment institutes or firm are willing to buy the mortgage as their portfolio? If not many of them willing the buy mortgage as their investment portfolio, mortgage companies will not be able to make more loans they want to. Then liquidation is still not there. If this problem is not resolved, can US housing market get better?

Will Senate's bill work? You are the judge.

Here is the link for the details on the news:

http://abcnews.go.com/Business/Economy/WireStory?id=4575448&page=2

Here is link for the video about the news:

http://abcnews.go.com/Video/playerIndex?id=4561743