Stephen: Great point. I know that with most first-time buyer programs out here a class is required, but not with FHA. They're counting on the mortgage loan officer to do the educating. Based on what you see on the news, how do you think we've been doing? BTW- the link in the last paragraph on improving their credit is meant for just that sort of thing. Thanks again.

Jason: Thanks, Jason. So how long do you think it will take for common sense and risk-based lending to help stabilize the market? Did you catch the 60 minutes 'article' on the housing market? Hmmm. I'm still a fan of sub-prime mortgages and stated income loans...some people just can't get in to a home without that sort of thing. There were just too many abuses (from consumers and the industry).

Richard: Sometimes the cure is worse than the disease, isn't it? My best loan program for low income folks ran out of funds (see recent blog posts). I'd love to see some good solutions. Maybe time is the only solution?

Stephen: What a truly radical concept. A little scary, but innovative.

Lenn: If you keep bottling up your feelings like this you just might explode. Tell us how you really feel. We're all friends here. ;) On a more serious note, I've been assuming that the mess we're in is a combo of consumer greed, overpriced houses and easy-money subprime lending. Maybe you can help me understand how FHA, Fannie and Freddie played a part in screwing up the market? I'd like more on that topic.

Marchel: Thanks. You're a big encouragement to me. I appreciate your friendship and comments.

Christy: Not too late. The low rates and the more flexible FHA and Conventional guidelines have combined to help me get many people out. Sure, not the ones who bought homes two years ago with 100% stated option ARMs, but many.

Renee: Yeah, I was surprised that it made so little difference in the payment department on $200,000 (probably the average FHA loan about now in  the Hemet area).

Allow me to play devil's advocate for a second, but don't the future owners of anything always pay for the mistakes of their predecessors? If we saw a company in another industry, say cell phones, cars or pajamas, change their prices in order to compensate for losses they've been taking, would we be up in arms?

I guess the part of our job that is service-oriented, the fact that we help these folks with such an important part of their lives, makes us some kind of advocate-activists for homeowners. It's more emotional than selling cell phones, cars and pajamas. We love our buyers and want the best for them.

Great to be in this discussion with you all...quality comments.

Stephen: Would buyers agree to it? If the recent rise in foreclosures shows us anything it's that some buyers will sign anything you put in front of them. But will legislators agree to it? Potential good side: people will think seriously before making the biggest financial decision of their lives, you'll weed out the jokers who can afford the payments but just don't like the idea of being upside down to go into default (uggg...that's awful behavior), and you'll save tax dollars etc...assuming there aren't more legal problems we're overlooking.

Yes, it should apply to all people not just sub-prime (what is subprime anyways? It's a fluid concept and I'd hate to have to legislate a fixed meaning). Potential downside...what about those (and there are many) who were lead astray by snake-tongued real estate professionals? This type of action could lead to financial disaster or ruin for them, and it takes time and money for a consumer to get some type of recourse for being taken advantage of.

No, I think that plan would mostly just benefit the large corporations that bundled these risky loans to sell to investors, the ratings agencies that said these were better investments than they were, and the loan officers who pull the wool over borrowers eyes for a quick buck.

It seems that often the cure is worse than the disease. There's a case for simply doing nothing. The market needs to correct itself. Bad investments need to be written off, mortgage companies that failed consumers need to go out of business, home prices need to go down. Life is seasonal...there is Spring and Summer and Winter and Fall. We just happen to be in Fall. I'm not sure legal or industry changes can do anything to stop that.

Other than give someone a slightly warmer jacket, so to speak. Thanks again for your great comments.