I've been watching the recent debates between both presumptive canidates on thier views of how to solve the nation's Mortgage crisis.

 

By no means is this blog an endorsement of any of the canidates. I'm simply stating what their plans are to try to resolve what seems to be a never ending foreclosure plague!  

McCain's views are that he will not bail out nor reward those who act irresponsibly (banks and homeowners)

Government assistance to banks should be based on preventing systemic risk that would harm or effect our financial system. His emphasis is that the market should find a way to fix the problems it created! NOT GOVERNMENT

Now on the other hand,

Obama's stance is a bit uncertain? He seems to be somewhere in the middle. What i've heard is he wants restraint from our government to do more that it has to. He is calling for a moderate tax cut that would provide homeowners with a bit of relief (next year?)

He does speak of regulations to protect homeowners from lenders poor evaluation processes. However nothing that seems to create immediate relief or aid for the current real estate crisis.

 

What i believe is that neither knows what to do! This mortgage crisis is not going to go away with small ideas and retoric. Canidates, corporate CEO's, Economists all are scratching their heads and don't know what to do!? I'd love to hear your ideas on what can be done.

 

Let's here what you AR gurus have to say?

 
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13 Comments on McCain vs Obama...Real Estate Crisis alert!

JUN
12
2008

Government needs to stay out of it.  Let the market make it's own adjustments.  Government does not know the ins and outs of the industry and they will create laws to do one thing but will most likely only hurt the majority that aren't causing the problems.
11:05pm • #1
281,205 Points 10 Featured Posts Called Shot Master

I say Americans need to get on their knees because we are heading into some very turbulent waters and only God knows how to navigate this ship!
11:11pm • #2
280,432 Points 3 Featured Posts Localism Sponsor Attended Rain Camp

I do think the market will correct it self but it will and is at a price. Maybe some gov't regulation on loose lending in the future might not be a bad idea. What about oil spectalators isn't this more of the same chaos.

Steve
11:12pm • #3
842,602 Points 85 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

Sara is right....we need to be on our knees and asking God to help right this ship.  I get so upset about the government getting involved with everything.  I think the government caused this market as well with the 13 rate hikes in just over a year.  I'm not big on either candidate....REALLY, but I do think that Obama is a fraud.  He's a media darling, not a leader.
11:16pm • #4

I have sent this to both candidates but have yet to hear from either camp.   Who knows, maybe if a third party were to run...

 

Solution to the United States of America Mortgage Crisis

 

  1. We must allow sub-prime mortgages to be refinanced into FHA loans.  We need to stream line this process so that it is not only easy for the home owner to qualify.
  2. The homeowner should be current on the home.  It is possible they have been past due but at the time of refinance, they are up to date.
  3. Appraisals should be waived.  If the homeowner is current on the property and willing to refinance/stay in the home at value, then it must be worth the amount of the refinance.
  4. We should verify they are employed or self employed however income to debt ratios should be waived.  If they are current on the home, they can afford the home.  Therefore, the ratios should not matter to the underwriter.
  5. The mortgage lender/loan officer/mortgage broker or mortgage banker originating the loan must be capped at 3% income. 
  6. All fees should be allowed to roll into the loan.  This way the borrower does not have to bring money to closing.
  7. The loan must reduce their interest rate or remove them from a potentially dangerous ARM to a fixed rate.
  8. All fees charged to the loan MUST be supported with an invoice from the entity collecting the fee.  For example: processing fee $400.00 must have an invoice from the processor.  This fee can be charged by the Mortgage Lender, Mortgage Broker or Mortgage Banker if they have on staff a processor or contract processor.  They cannot charge this fee if they process the loan themselves.

9.          The taxes and insurance MUST be up to date and escrowed on these loans.

10.                       Owner Occupied Homes only.  NO INVESTMENT PROPERTIES.

11.                       Increase the Mortgage Insurance from .50 on these loans to .75 to be fair with the Mortgage Insurance Companies.

 

By offering a program like this, a consumer with a $125,000 loan would lower their house payment from 10.00% to say 6.50%.  This would be a savings of approximately $300.00 per month.  PER MONTH.  What kind of economic stimulus package would that be for Americans?
My solution
11:29pm • #5
333,747 Points 1 Featured Post Outside Blog

Oh gee I am not going to comment much on political things here but one thing for sure....things are messed up!
11:45pm • #6
3 Featured Posts

Despite the housing crisis occuring....I already see this issue taking a back seat to the energy crisis.  I think the issue of energy & oil will be taking a more prominent seat in the election than the mortgage crisis.
11:53pm • #7
JUN
13
2008

Hey Jeff, Great point about the gov. not being penny wise about real estate. Seems they would only make matter worse!
2:31pm • #8
JUN
15
2008
6 Featured Posts

I think it's just like a poopie diaper.......Everyone can smell it.  Everyone knows it stinks.  Everyone wants somone else to change it! 
3:06am • #9
Localism Sponsor

I work pre-foreclosures daily and there is one thing that I have found to be criticly lacking. And that one thing is COMMUNICATION.

Not just from the servicers to the homeowner, but in every single aspect of prevention. And to top it all off we have agents that dont know a thing about a short sale or other pre-forclosure alternative messing things up with poor and irresponsable listings and so on.

I personally would like to see some regulations enforced to control who can and who cant do a pre-foreclosure sale for a customer. The stakes are too high for an non screened agent to conduct a sale when they could barely close a regular deal, much less a short sale.

Now that I got off topic of my own post (just a little) I would like to see communications lines being opened up with the servicers. I know we have a LOT of listings for short sales, and everyone shouldnt have a direct line to servicer negotiators, but someone needs to streamline the process. I have established a very good list of direct lines to most of the loan service negotiations departments, but in good faith I wont share these numbers.

But anyway, its awefull late but I just thought I would stick part of my 2 cents in on this subject.
3:22am • #10
JUN
16
2008
150,554 Points

Energy and housing are both issues that need to be addressed, as they are inter-related, as are most things in the economy.  Without giving away my political leanings, I feel that candidates for the most part can promise and wish anything they like, but if something cannot get through congress, it doesn't matter.

I think as far as the housing and lending "crisis" there is plenty of blame to go around.  Ialso think that if the banks were quicker to deal with short sales, it would somehow help.  It just doesn't seem right for these deals to take four, five, six months.

Idon't have a solution, just questions.....
1:45am • #11
JUN
17
2008
1,423,603 Points 41 Featured Posts Outside Blog Attended Rain Camp Called Shot Master

a summer gas tax cut would certainly not be an option
7:09am • #12
JUN
19
2008

The Government needs to butt-out.  Left alone, the market will straighten this mess out, but the government has such a heavy hand on things now that it seems we might be in for a long tough spelll no matter what.   Kai
12:31pm • #13
SEP
18
2008
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