I try to stay up on local and national news as it pertains to real estate. This morning I was looking at our local paper on line and couldn't believe my eyes. I really don't watch much TV so maybe more of you have heard this before. In one of the stories on refinancing, one of our local lenders commented on how helpful proposed new "no appraisal" loans would be for the industry. HAVE WE LEARNED NOTHING!!!
Let's think about this. We have sellers upside down in their homes. I have an idea! Let's give them loans that have nothing to do with the value of the home. One person commented that, now that democrats are in we can solve this issue with such programs. Now I do my best to stay away from partisan politics but let's be honest. This path to ruin started with the community reinvestment act. Hmmm, which republican what that? Oops, that was Jimmy Carter. Don't get me wrong. Jimmy Carter is a kind, benevolent man who puts feet to his faith. Unfortunately, he doesn't seem to understand basic economics. Forcing lenders to give high risk loans for the privilege of doing business is bad business. I can still hear lenders coming into my office complaining about that program. At least the ones with any economic vision.
Fast forward...The Bush administration warned the Fannie Mae and Freddie Mac were headed for trouble. Which republicans shot that down? Oops again...It was Congressman Barney Frank and Senator Chris Dodd that said "hands off." Frankly, (no pun intended) I'd prefer to forget party affiliation and say, let's get our heads together and work on a solution that will actually solve the problem, not prolong it. In my experience, prolonged problems only get worse. It just takes a little more time.
As a real estate agent I am obviously in favor of home ownership. However, if those happy homeowners are being set up for a fall, what have we gained? I'm not an extremist. I don't believe we have to go back to 20% down loans. In my younger days I had countless buyers using FHA or VA loans without default. Truth is, they're still good loans. FOR THOSE WHO ACTUALLY QUALIFY! There is no easy or immediate fix for the present situation. It will take time. But please, let's not compound the error with more reactionary "solutions".
Comments (2)Subscribe to CommentsComment