Home : Blogs : Carol Smith, ReMax Preferred, REALTOR®, Toledo, OH : Home Life

Attitudes on Housing Relief

I have just finished reading an article in the that speaks to the matter of the federal government providing a remedy for relief in the foreclosure crisis that we are experiencing. As with most things, there are portions that I can agree with and portions that I think are pure drivel.

For instance:

"...the Senate stalled legislation that would strengthen the Federal Housing Administration's mortgage programs, a key resource for homeowners who need to refinance out of adjustable-rate loans into more affordable fixed-rate ones."

So, in the classic manner of political double-speak, there is a rising cheer of "Let's save the folks that are upside down!" coming from one building, but in the building across the street..."Sure, that's important. But it can wait till I get my belly full of Thanksgiving turkey/ham."

It's enough to make me want to cry. Everyone agrees that something should be done, but not everyone is willing to look at all the options. FHA is a valuable, but rarely used, asset. We, as Realtors, should become better versed in the positives and negatives of this program so that we can provide our clients with solid advice.

And then there's this:

"The FHA bill is particularly important for high-cost housing markets -- California and parts of the East Coast in particular -- because it raises the maximum mortgage amounts the agency can insure. It also would cut minimum down payments and allow the FHA to charge lower premiums to applicants with better credit histories and higher premiums to borrowers with less-favorable credit."

Now I don't know about you, but I always thought that mortgages were written based on a person's ability to repay the debt. At least in a perfect world that's what happens. BUT - all foreclosures are not due to subprime lending. A much larger percentage are due to loss of jobs and income. I know that's more the case in this part of the world.

While I am not a proponent of government intervention to save people from making bad decisions, I do feel that this legislation is just another part of the market correction that is taking place now. If the powers that be actually do something constructive with the FHA rules and make it a more user-friendly program, I can see a true resurgeance of FHA loans.

If you'd like to read the entire article, please go here.

**Images from Google Images library**

Posted by Carol Smith, ReMax Preferred, REALTOR®, Toledo, OH on 11/26/2007 10:30 PM

Comments (6)

fha, toledo, ohio, senate, adjustable rate, arm, mortgage

6 Comments on Attitudes on Housing Relief

Carol-

Check out this program from HUD:

"Hope Now"! New HUD Program

The new Housing and Urban Development (HUD) initiative brings together foreclosure prevention counselors, mortgage servicers and other mortgage market participants in an alliance to help home owners who are facing default.

HUD No. 07-152
www.hud.gov/news/

11/26/2007 10:37 PM

by Paige Rausch (Gulf Gateway Realty, Inc.)

The banks are making it hard for consumers to work with them. Unless the consumer is 6 months behind they get the hatchet person at the mortgage company who will not talk to the consumer. As a Loss Mitigation consultant for over 10 years, I have not seen the lenders really changing. Matter a fact they are helping hype the wrong information to the news media who love to scare people. How can 2% of the homes in foreclosure cause the whole real estate market to slow? The media is feeding off of the lenders and overhyping the information to the consumers.

Dowell Taggart Team

11/26/2007 10:51 PM

by Chris Dowell (Dowell Taggart Team)

Hi Carol,
I'm not for government intervention but people in trouble do need counseling, guidance and solutions. What is the solution? Wish I had a magic wand but mine is missing.

11/27/2007 06:55 AM

by Cynthia Tilghman, Realtor® Onslow County NC Home Specialist (Kingsbridge Realty, Inc)

Paige - Thanks! I will check it out. Glad you stopped by!

Chris - I know the first piece of advice people get is "Call your lender" but if a person is just heading into trouble the lenders typically won't talk to them. For that that say "Lenders don't want houses" then they need to let the lenders know that they should talk to people BEFORE they reach the point where they HAVE to take the house.

And the media is a whole 'nother post. Makes me want to bite somebody!

Cheryl - The media - be it local or national - is NOT a friend to Real Estate. Fear mongering and panic are the typical pasttimes for most media outlets. It's what makes them feel important.

Cynthia - I am not for government intervention - AT ALL. I think people learn from making mistakes. At least that's the logical way of thinking, IMO. But since government is intent on 'fixing' this mess they need to do it without delay and with great care. This whole thing should not be just another warm fuzzy in a re-election campaign. My magic wand is broken - I have waved it so many times it just wilted and won't snap to. :)

11/27/2007 07:39 AM

by Carol Smith, ReMax Preferred, REALTOR®, Toledo, OH (www.calltoledohome.com)

Carol: I personally think that...when you have such a widespread problem...such as we have...the remedy has to also be widespread. We can't afford to 'wait and see'...it will be too late to 'do something' if we do that. Like you said, there are many instances of foreclosure that have come about because of loss of job and other tragic life events.

Thanks for a great, thought-provoking post!! Blessings!!!

11/27/2007 03:36 PM

by Elizabeth Nieves - Bilingual Raleigh - Durham North Carolina Real Estate Team (The Elizabeth Nieves Realty Group @ Keller Williams)

Elizabeth - I agree that we have a widespread problem. I'm just not sure that government intervention is the 'safe' answer to that problem.

I believe that if we (collectively) search out the root cause of the problem that many times government intervention may not be warranted. It's just too easy to look to the politicians and say "fix this" and then move on as if it never happened.

I am an idealist, I know. But a 'one size fits all' solution to such a complex problem seems counter-productive to me.

Thanks for visiting. Always glad to see you!

11/27/2007 08:37 PM

by Carol Smith, ReMax Preferred, REALTOR®, Toledo, OH (www.calltoledohome.com)

Carol..One of the biggest problems is that Legislators can't do anything about problems they don't know anything about! And I'm willing to bet most of them don't have a clue...how can you when you have the daily news condensed and spoon fed by a faithful aide?

11/27/2007 10:12 PM

by Joan Mirantz- Concord New Hampshire Realtor (Keeler Family Realtors)

Joan - I tend to agree that legislators, by and large, labor under a cloud of 'I had no idea' and they like to stay there. But even if they are relying on media reports they would have to know that the housing market is not the only issue on the table. Unemployment is up, healthcare is off the boards, education is suffering, public assistance numbers are up, etc.

I just believe that the 'housing crash' (God! how I hate that term!) is a by-product of a much bigger problem. Fixing the issues with mortgages and housing issues will not fix unemployment, poor education of our children, etc.

Kind of like taking a knife to a gun fight. You just can't win.

11/27/2007 10:31 PM

by Carol Smith, ReMax Preferred, REALTOR®, Toledo, OH (www.calltoledohome.com)

Leave a response…

Name:

Notify me of new comments:

Comment:

What does the graphic say?