Well, I did not expect to get this type of response: WOW!

By
Mortgage and Lending with Lend Smart Mortgage NMLS#207208 NMLS 207208

Recently I sent an email to my congressional district representative to let him know I support Down Payment Assistance Programs such as Ameridream.  DPA is about to be gone and I think our politicians have little knowledge of the overall effect on our local real estate economy.  In just the last 12 months, I have used Ameridream an average of once of month.  Now these buyers will have to wait a much longer period of time to enter the buying market. 

Anyhow,

Here is Mr. Mitchell's response. 

I do not think this guy has any real idea on what he voted on and how this will effect his constituents.

 

Here is his response letter:

July 24, 2008

 

Mr. Gary Earl Miljour

1205 E Vinedo Ln

Tempe, Arizona 85284-1531

 

 

Dear Mr. Miljour:

 

Thank you for contacting me regarding down payment assistance. I appreciate hearing from you on this issue.

 

Historically, home ownership has been an important way for families to build wealth and get ahead financially. More than two-thirds of Americans own their own home, and it is important that we continue to encourage home ownership.

 

Down payment assistance allows first-time and nontraditional home buyers to receive grants for down payments on affordable loans without the initial capital that is usually required.

 

Unfortunately, some companies that provide down payment assistance were helping lenders to make predatory loans in the height of the housing boom. The down payment assistance provided by some organizations allowed sub-prime lenders to persuade home buyers to assume more debt than they could otherwise afford. As a result, both the Internal Revenue Service and the Department of Housing and Urban Development issued rules to prevent this kind of coercion.

 

Please be assured that I will continue to press for more ways to help promote home ownership. Should related legislation come to the House floor for a vote, I will keep your interests in mind.

 

Again, thank you for taking the time to write to me about this issue. Please do not hesitate to contact me in the future with regard to this or any issue if you have additional comments or concerns.

 

If you would like to receive email updates about how I am working on behalf of Arizona's 5th Congressional District, I invite you to sign up for my newsletter at http://www.mitchell.house.gov

Sincerely,

 

Harry E. Mitchell

Member of Congress

HEM/AS

 

All I can say is "WOW", I feel much better now.  This guy is truly looking out for our best interests.  Politicians involved in mortgage banking and real estate is a trainwreck ready to happen. 

 

 

 

 

 

Posted by

Gary Miljour, Licensed Mortgage Loan Originator: 

 

 

 

 

 

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Silent Majority
'ACTIVIST' Rain
Tags:
ameridream
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Rainer
16,477
Bill Schwent
Casa Tierra Realty - Santa Fe, NM
Santa Fe Broker

Gary,

Your congressman does sound a little in the dark.  If our congressmen and women did not have to spend 75% of their time raising money for their campaigns. I suspect they might have more time to think these things through.  However, I can also understand the reluctance to move on "nothing down" financing when most of our markets are still losing value and probably will through the end of 2009.  When values have decreased, the first ones to walk from their mortgages are those who have no personal investment in the property.

Jul 26, 2008 08:27 AM #15
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Bill-  My take on this whole situation is that HUD's argument has been very weak.  They state that statistically the default rate on these loans are slightly higher, however they still cannot make a direct correlation between DPA and default rates.  In the 15 years I have been around the real estate market, I have seen 3 major reasons why people default on mortgage loans. 

  1. They loose their Job
  2. They get divorced
  3. They get sick

I think the best solution would of been to make the guidelines on FHA loans that use DPA to be a little more strict.  This would of solved the problem, end of story. 

However for a congressman to state that FHA is the new sub prime is ridiculous.

Thanks for the comment. 

Jul 26, 2008 10:08 AM #16
Rainmaker
566,519
Delaware Junk Removal Residential And Commercial Hauling Clean Outs
Delaware Junk Removal 302-530-9186 - Wilmington, DE
Whole House Clean Outs, Basements, Garages, Attics

Gary-  Here are the last 2 paragraphs as sent to me in PA.   Compare them its spooky!

1 Rest assured, I will continue to support efforts to encourage home ownership and the responsible reformation of the FHA.  I will certainly keep your views in mind should similar legislation come before the house for a vote.

2 Thanks for sharing your thought with me.  Please do not hesitate to contact me in the future on any issue of concern to you or your family.

There must be a form letter for all those guys and gals just like the one we sent from the Nar

Jul 26, 2008 12:42 PM #17
Rainmaker
347,485
Alan Brown
Coldwell Banker Montrose Colorado - Montrose, CO
29 Years of Real Estate Experience .

Your congressman never saw your letter or even knew you sent one. This just a boiler plate response form any,and  every congressman's office sent out by his staff. It's ashame but true.

Jul 26, 2008 12:53 PM #18
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Larry- That is quite scary.  They probably know that they threw the wrong people under the bus.  I guess my decision for his activities will be made at the voting booth at re-election. 

Alan-  I agree it is probably canned.  But my vote is not canned. 

Thanks for the comments

Jul 26, 2008 05:23 PM #19
Ambassador
250,962
Jesse & Kathy Clifton
Jesse Clifton & Associates, REALTORS® - Fairbanks, AK
Retired

Gary... it's a shame that these programs have to go away because they offer legitimate help to some folks.  I'll bet you $5 though that letter was written and signed by a LA.  Chances are HIGH that Mitchell never even saw it.

Jul 30, 2008 11:35 AM #20
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Jesse,

You are probably right.  I a shame that this bill had to be pushed out so fast.  Time will only tell what the outcome will be now.  Like I said before, we threw the wrong people under the bus.  My congressman included. 

Jul 30, 2008 11:38 AM #21
Rainmaker
227,946
Gene Wunderlich
1st Action Real Estate - Murrieta, CA
Realtor & Legislative Liaison

I posted a letter I received last week from our State Senator Diane Feinstein on the oil crisis and, yes, just like this one, it's a canned response walking the party line. I at least applaud them for responding and pretending they care about what we think but the fact is they are out to lunch. Several lender friends are very upset with this elimination of DPA programs as they account for as much as 45% of that first-time buyer market. It will have a profound effect on the market recovery at a time when we need it least. But it was part of the give-and-take to get the bill passed. HUD has been pressing for this ban for a long time and finally had their chance by horse trading for increased loan limits and a sacrificial lamb to be named later.

Interesting that this huge potential downside is not addressed in any of the NAR or state association 'talking-points'.

Jul 31, 2008 11:59 AM #22
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Gene- 

"Interesting that this huge potential downside is not addressed in any of the NAR or state association 'talking-points'."

Its funny how DPA has received very little attention.  I know in my area DPA accounts for at least 30% of my 1st time homebuyers.  They got brushed under the carpet and it is truly sad. 

Thanks for the comment. 

Jul 31, 2008 12:24 PM #23
Rainer
14,614
AMY SHRADER
Hurst Real Estate & Auction - Morristown, TN

Personally, I have never understood how DPA's were allowed in the first place.  Basically the seller is making the buyer's down payment and inflating the sales price in order to do so. If anybody can explain to me how that is legitimate, I am willing to listen.

Aug 01, 2008 03:49 AM #24
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Amy,

How is there an inflation in Sales Price?  The sales price is agreed upon by the buyer and the seller and the home still has to be appraised by an independent appraiser.  Unless an appraiser is committing some fraud scheme to inflate value which is fraud, I do not see how it is inflating a price.

In my market, the buyers are asking for DPA and most of the time the appraisal comes in above the sales price. 

Aug 01, 2008 04:01 AM #25
Rainer
11,342
Robert Lowery NMLS 211598
Prosperity Mortgage - Perry Hall, MD

Gary, I agree with your comment to Amy.  It has to be supported by an appraisal.  The issues arise when their is appraisal fraud.

I also posted my letter from my congressman.  Its very similar.  I think we should have a contest for the most ridiculous response from our congress.

And, they wonder why their approval rating is lower than GW's?

Aug 01, 2008 12:46 PM #26
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Bob- I will have to scoot over to your blog and check out your response.  This law is a trainwreck ready to happen.  Thanks for the comment.

Aug 01, 2008 07:35 PM #27
Rainer
213,941
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

The problem is career politicians.  And we keep re-electing them over n over n over n over n over n over.  If they knew they had to come back and live in the real world they made, we wouldn't have a deficit, our economy wouldn't be trashed, OK, I'll stop now. 

Aug 01, 2008 08:08 PM #28
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Doreen- You are so correct about this.  I think it is time to clean out Washington.  I sure will be when I goto vote this year.

Aug 02, 2008 03:02 AM #29
Rainer
213,941
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

Yes, turn the box upside down and give it a good shake.  Empty it completely!

Aug 02, 2008 06:06 PM #30
Rainer
108,548
Christine L
Property Cupid, LLC - Chandler, AZ
Broker

Gary, Harry Mitchell is a good example of why Realtors need to make sure they VOTE. 

Aug 08, 2008 03:28 PM #31
Rainmaker
217,447
Mark Organek
And the United States of America - Mesa, AZ
On a journey to accomplish one huge goal.

Gary, although I'm in support of DPA's based on the current market condition and even though I feel that Mr. Mitchell did a crappy job with you by disrespecting you with a joke of a letter that wasn't even close to being true, I do agree with Amy that seller funded down payment assistance programs do inflate the sales price.

If a person was not in need of DPA, would they pay the same price?  Although the loophole worked for as long as it did, the buyer did "build into the loan" the down payment.

I really thought it to be stupid to end the DPA's at this time.  Now, we will have a glut of people trying to rush in before the deadline, bidding up prices to where there will be a difficulty in identifying true market value.  When the deadline hits, the absence of legitimate buyers will cause prices to destabilize and drop in order to make buying a home with 3.5% down as "skin" attractive.

Aug 08, 2008 05:51 PM #32
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Christine- I agree 100%.

Aug 09, 2008 02:36 AM #33
Rainmaker
149,087
Gary Miljour
Lend Smart Mortgage NMLS#207208 - Southern Pines, NC
Mortgage Originator NMLS Licensed in AZ and NC

Mark- Again, my position is this.  How is it an inflated price if a buyer and seller agree on the price and an independent appraiser gives it a value.  Would this not fall back onto the appraiser.  If the home is worth that price and the comps substantiate the price and it does appraise how is that inflating prices?,  I just think this is a very weak argument to get rid of DPA's.  Notice they have a new bill to bring them back.  Again government being reactionary. 

Aug 09, 2008 02:40 AM #35
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