Too Little, Too Late: Latest Government Housing Help Misses the Mark

Real Estate Agent with Curtis Johnson Realty

foreclosuresPhoenix homes are rapidly going into foreclosure these days. Once again, the government has taken it upon itself to "remedy" this situation. This time, they are offering loans through the Federal Housing Administration that alleges to help those who owe more on their mortgage than their properties are worth. Some feel that this is a huge risk for our government, especially since they aren't exactly known to have been frugal with our tax dollars.

There's a catch, though. Borrowers must not be behind on their mortgage payments. The problem with this is that most who are not behind on their payments probably neither need nor want the government's help. While no one is happy about being upside down on his or her mortgage, that's just par for the course--it happens sometimes in this economy.

This program would likely only appeal to those who are behind and are in trouble. Unfortunately, this program won't help them. In addition, this program should have been unveiled years ago, when the problems first began. These days, so many people are so far gone in their mortgages that a program designed to help only those who are caught up on payments won't be of much help.

If you're looking for some help in selling your home, perhaps because this new program won't be of any help to you, call Curtis Johnson today! Curtis and his team will gladly help you get out from being underwater and get back on track. Curtis Johnson's team specializes in helping buyers and sellers in the Phoenix area, and the team will gladly assist you today!

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Craig Richardson
National Realty - McLean, VA

Curtis, say it isn't so?  Our federal government didn't get something to be a first.

Apr 07, 2010 02:05 PM #1
Curtis Johnson
Curtis Johnson Realty - Gilbert, AZ

Sad, but true Craig. If the Government keep fixing it ... why does it keep needing help? Govt breeds more Govt. and we in real estate have to pick up the pieces and make sense of it.

Apr 07, 2010 03:31 PM #2
Mike Carlier
Lakeville, MN
More opinions than you want to hear about.

Helping homeowners who should be renters is not the solution to the real estate and unemployment problems of our country.  Focus needs to be on the millions of homeowners who are comfortably making payments on their home purchases of 2004-2007.  They are gainfully employed, are in no danger of losing their home, and can easily make a monthly payment substantially higher than their current responsibility.  They live in their starter or first move-up home and really want to trade up.  The family has gotten larger, the garage needs another stall, they want a backyard, etc. Unfortunately their loan balance substantially exceeds their current equity.  If they continue to make their monthly payments, the loan will amortize to even in 10-14 years.  They don't have to move, but they really want to move, and they can afford to make the increased payment.  They are the potential buyers for our stagnant housing market.  They can put construction workers back onthe job, and that would help our economy tremendously.

With government encouragement and, perhaps, government assistance, a principal reduction plan has to be put in place.  I suggest that, in exchange for an agreement by the homeowner to increase their monthly payment, banks allow a temporary incremental reduction in interest charged.  This would accelerate the reduction of the negative equity and allow for considerably more mobility among "stuck" homeowners.  We would likely see results in a couple years.  Instead of delaying the return of accidental homeowners to the rental market, emphasis must be placed on helping the segment of homeowners who have the potential to get the real estate market and the economy back to cruising speed.

Apr 08, 2010 02:03 AM #3
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