Ann,

I think it is not a wonderful boost to our industry. Jim Crawford wrote that it is a politician's bill and a bankers' bill. I think it is just a politician's bill, and I think it will work to drive further down our market.

It seems very expensive for what is accomplished.

Spending our money just to be able to say we did something, and perhaps under pressure from foreign investors.

Thanks,

Richard

Vickie,

You have just about expressed my thoughts exactly. This government makes me sick to my stomach. This new law, signed in a closet, just adds to my illness.

The tax credit/loan is for people who meet the income restrictions and have not owned a primary residence in the last 3 years.

I took calls today about the FHA refinance program. I do not know the details - who can do the loan, how do you negotiate the settlement. No one has any details. These loans will be impossible to process and close.

It is a big distraction from dealing with market realities, and a way for politicians to say they did something, nevermind that it is something not workable.

In this case haste has made a very big waste.

The links I have for the actual bill (not the final law unless the bill is unchanged). You may have already seen these.

 http://www.opencongress.org/bill/110-h3221/show

http://www.opencongress.org/bill/110-h5720/text

Although I like the NAR summary given on Robin Willis' blog

http://activerain.com/blogsview/616907/Housing-Stimulus-Bill-Signed

http://www.realtor.org/gapublic.nsf/pages/hr_3221_key_provisions?OpenDocument

Thanks,

Richard

Steve,

I liked the seller funder assistance programs. My guess is that they did some kind of charity work - they had to withstand some IRS pressure to keep their status.

I do have some horror stories from some programs. One sent a check that bounced. That company folded, leaving some poor receptionist to handle the calls. The principles disappeared in the hills of Kentucky.

Another company wanted to fax a copy of a check and have the title compay just send their fee. Now that is funny. The loan officer argued with me that that should be OK - it was no different that funding and being immediately reimbursed.

I think the program helped a lot of buyers for a long period of time. The home sales that these buyers accounted for  will not be replaced.

So, we have lost 30% of our FHA sales.

We better get started replacing them with new buyers from somewhere. I am sure that the House Finance Committee and the rest of Congress has a plan.

Richard

Ronald,

It is not transparent bill - it is loaded and in my opinion passed without adequate comment at a time when industry voices were especially weakened.

They had to do something, and they sure did.

Richard

Jim,

So, what do you think of the new Housing law?

Richard

Bo,

Thanks for passing the link to Hope Now.

The last two major mortgage bills were both dealing with issues that the market had already addressed. The predatory lending bill made illegal loans that do not exist anymore. Lenders are already negotiating short sales, new payment arrangements, and new loans when circumstances warrant.

TN and other states are already instituting originator licensing and education requirements.

I wish the federal government would pass bills separately, so each could stand on its own merit. I wrote a post about that some time ago. I toned it down from my actual feelings, but I wish I had written what I had been encouraged to write at the time.

"The thinking is that if the legisislation were more transparent, then our elected leaders could not work out that kind of behind doors deal. And frankly they should not be able to do so."

Thanks,

Richard

Steve,

Appreciate your comments, and love your new blog design.

I had some FHA defaults, and some with DPA's. We have used DPA since the 90's. We have LO's here who think FHA means DPA, that it is the FHA 100% program.

Every FHA DPA default that I know of was a weak file in all areas of the loan - no down payment, weak and limited trade lines, no housing history and large housing increase, some with weak employment histories.

The underwriter probably should have denied the loans based on layering of risk, and probably some of the defaults were denied by the first lender or even the first couple of lenders.

We submitted loans to different lenders until we found an approval or until I said stop. Nothing exactly wrong with the files, they all met the minimum qualifications. But the files were too weak.

Our goal was if a loan might possibly get approved by someone (legitimately - no misrepresentation), then we tried to get it approved.

DPA probably should not have been allowed on files without established good credit, including 12 or 24 months satisfactory housing.

I am as guilty as anyone in using DPA to get weak borrowers into an FHA loan.

Richard

Ann,

I probably should have picked better up on the intent behind the original comment.

Thanks,

Richard

Roland,

The bill is law, and now we will see what transpires. I know that the lenders are waiting for some guidance from HUD and the other agencies.

There will be no developments until guidelines are promulgated.

Richard

Danny,

I just think the bill was rushed. Too much in it to be passed underpressure.

Richard

Ronald,

I do not think they are saying millions will be helped. The numbers I have seen are 400,000 to 500,000.

The more I look at the bill the worse it gets. I had another post going into more detail about the Foreclosure relief. I actually think that the maximum closing cost is set at 2%, and that limit is written into the law, at least the version I read.

We probably need to hold judgement until the mortgagee letter is published, but it does not sound promising to me.

Richard