Our Government could easily contribute to the stabilization and upturn of our housing debacle if they choose. Our maybe they are so "Hell Bent" on bankrupting our nation they just don't care. They are so focused on this health care issue everything else is put on hold or is being used as a smoke screen. But this is a simple fix with minimal capital. First some facts.
Are the Democrats like Chris Dodd, Barney Frank, Pelosi & Congress the past to blame for our financial mess? Who championed homes for everyone even if they couldn't afford the mortgages? Who furthered the government subsidizing impossible mortgage assured to leave homeowners upside down if appreciation didn't continue as planned? Let us not forget Obama. He sued banks, mortgage companies and other financial institutions to force them to give no credit check, no down payment, and no collateral loans on grounds that such requirements were racist. Finally the Republications gave a detailed report to the Barney Frank Federal Housing Commission in 2002 on the impending collapse of Freddie and Fannie. However it was quickly dismissed and it was stated that they were sound. Well we all know what happened and the hundreds of fingers started pointing in all directions. This is not a political bias here, just facts.
The United States has seen a 112% increase in the number of foreclosures in the past 12 months. This is an indicator that most of the American citizens are not in a position to pay their mortgages in time hence they are evicted out of their houses.
There are expectations that if the economy in the United States does not improve there will be an increase in the number of foreclosures and the percentage may hit 150%. This is because more people are becoming bankrupt each day. This is as a result of a survey that shows that over 1.1 million homeowners will face foreclosures at the rate that the economy of the United States is moving.
The current statistics show that 286000 out of 44 million mortgages result to foreclosures. This is a very large figure when it is translated to the total number of mortgages that people are taking up. The result could be a great number of people losing their hard-earned money on foreclosures and they are left homeless.
As a result there has been a glut of "Short Sales" processed and being processed in lieu of foreclosure. Depending on which state you are in the ramifications of such could be costly. But this is not the reason for this writing. However, it is important that these statistics should be brought forward. Also, note this information shows what is coming down the pipe, not what has already happened.
As we all know much of the housing collapse was a result of FredieMac (Federal Home Loan Mortgage Corporation) and FannyMae (Federal National Mortgage Association)
As you know the government gave $8,000 in tax credit for "First Time" home buyers. That makes the market directly focused on the first time home buyer. But what about all these others who either made bad decisions, get a bad loan or was granted a loan for a home the lender knew they could not afford?
Then you have these other people who bought their home at the peak of the market and within a short 2 years they devalued some 50%. These home owners had to think about what they could do as they were and are throwing their money in a black hole. They can't sell them as they are upside down. So what are they to do?
There are four options:
1. Try to ride it out
2. Try to get a loan modification
3. Short Sale
4. Walk away (Foreclosure)
But with decision 2,3 and 4 your FICO score will be impacted taking you out of the market for a new home or any major purchase. So many of these stimulus programs out there you can't qualify for.
But there is a simplistic answer to this problem. I can't understand why this has not been proposed. The cost for this would be so small it would not even come close to the $30,000,000 earmark to save a turtle in San Francisco.
So here is the Bill. I will even let Barney call it the Barney Bill. It would be not 1000+ pages but one.
Anyone who had a foreclosure or a short sale from 2005 to the end of 2009 would make application providing all required information of their lender, loan numbers and other pertinent data to the Fed (an agency of their choice) to have a onetime "forgive" from the three major credit reporting agencies Experian, Equifax, and TransUnion removing any record of the lender and payment history of same that was involved in the foreclosure or short sale. This is a onetime only action.
This Bill if written would be a simple fix to a complex problem. This would immediately place 100's of thousands back on the market and with repaired FICO scores and with the new lending regulations their prospects of being a home owner again could be realized and at the same time stimulate the housing market and other markets.
I told you it was simple. I know many families who's FICO score was in the high 700's and low 800's who lost their homes and their current FICO score is low 500's to low 600's thus taking them out of the market.
I am sending this blog to my Senator I would ask you to do the same.
Dale Simmons
DSE Realty
Comments(0)