Dear Mr. Lieberman,
If the politicians actually spent time with the mortgage professional community, not necessarily just with federal or state chartered bank executives, discussing ideas and potential solutions, we possibly might be able to make a difference. Congress and these executives are far from the realities which actually exist in the market place. While I agree that the highest delinquent borrowers are the ones putting little of their own cash down and getting Down Payment Assistance, once eliminated the next highest delinquent borrowers would be those next in line that put 3% or 3.5% down. The problem would still exist. It also is creating fewer home buyers in the market which would help curb the supply and demand theory. Congress can't honestly believe that providing a tax credit of up to $7,500 is going to get most people off the fence, they are dreaming! After reading all the rules on recapture terms, married couple splits and the 10% purchase price cap, it's ridiculous. If they really think we have problems now, just wait. For someone to max out and receive a tax credit for $7,500 they'd have to be purchasing a home for $750,000. These benefits are NOT going to the hard working middle class American, nor will they make much of any difference. Politicians and these banking executives can't believe that Americans are that dumb!
My personal belief is that keeping these programs in place and increasing the total upfront mortgage insurance and/or monthly premiums these people pay would be more appropriate. Or, having them participate in some matching fund program would at least allow these potential borrowers to be able to purchase and at least begin to stabilize the real estate values for many others. If this doesn't happen and our existing situation continues more people will begin to evaluate whether walking away is more advantageous than wasting money on something that continues to decline in value. You really can't blame people from doing this. American businesses cut there expense and losses every day. They sit down and have to make very difficult decisions everyday, we don't want this conversation to be the one the American family must have sitting at dinner with their children. No more the American dream, the American nightmare...
The Major Cause To These Problems have been SOLVED!
Sub prime mortgages are gone. No income verification mortgages are gone. Stated income vacations home mortgages are gone. Negative amort mortgages @1.25% are gone. PIC a payment mortgages are gone. Interest only mortgages are slim to none. These are the programs that were abused and taken advantage of for over the past 7 years. Let's be smart!!!!!! We need to start lending again!
We should protect FHA, Fannie Mae and Freddie Mac. Those who have lower credit scores and/or participate in any down payment program should pay extra insurance for protecting these entities. Too many years have gone by with no actions that this panic mode will continue to perpetuate declining property values if qualified buyers can't get access to first time mortgage money. Congress needs to force these banks to continue to lend as opposed at protecting their profitability. They continue to give low CD rate terms, now can borrower from the fed at extraordinary low rates, yet continue to horde these funds and are hesitant to lend. If they are not lending then the must be getting this money to sure up balance sheets, pay dividends, and/or continue to pay themselves and their colleges high salaries.
I agree we must change the game, but for God sake, get valuable input from the players who have faithfully been on the field playing your game by the rules. Stop blaming and ignoring us, we are the ones who have made these banks and investors, millions of dollars over the past 7 years playing their game and by their rules. The rules reviewed and approved by those in charge in congress, the state and the federal government and ignored for many years because of greed.
If you really want to make a difference spread this message and I promise I'd get 3000 soldiers that would back you! I believe in America, I am just losing faith in the system because most go with the flow and aren't willing to stand up for what is right! NOW IS THE TIME!
RonGiannamore@ToMortgageServices.com
800.922.3210 ext 121
203.841.2554 fax
From: correspondence-email@lieberman.senate.gov [mailto:correspondence-email@lieberman.senate.gov]
Sent: Thursday, July 31, 2008 3:23 PM
To: Ronald Giannamore
Subject: Correspondence From Senator Lieberman
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