Like many other Americans, I was enthralled by the inaugural speech today and delighted we have at our country's helm someone who understands the importance of confidence. Thank you, President Obama, for ushering in a new era where drama, fear mongering and deception have no place.
The housing industry accounts for one-fifth of this country's jobs and the health of the housing industry has a great deal to do with the overall health of our economy. It is, therefore, important that the problems of the housing industry be addressed in a meaningful way...and quickly.
There are several proposals being tossed around but here are my thoughts:
The $7500 tax credit available to first time homebuyers should be available in the form of down payment assistance. I believe that it should be repaid...that's part of being a responsible borrower, citizen and homeowner.
A moratorium on foreclosures of owner occupied homes should continue for another few months. During that time, the mortgage companies be mandated to enter into serious negotiations for loan modification...extend the term of the loan, lower the interest payment, add unpaid payments to the end of the term of the loan...whatever helps keep someone in their home. If the consumer does not take this opportunity to initiate a loan modification within thirty days after being notified of the possibility, then the mortgage lender should be able to proceed to foreclose. If the mortgage lender will not consider loan modifications, they should be penalized in some meaningful way. The goal is to keep people in their homes if at all possible. This will help individuals, neighborhoods and whole communities...and ultimately the country as a whole. The lenders would gain by helping to stabilize the markets and, ultimately, seeing their loans collateralized in a meaningful way. Not without pain for all involved, but, a reasonable alternative to the continued rampant foreclosures.
Continue to maintain downward pressure on mortgage interest rates. This will help more people entering the market for the first time...and help with reasonable loan modifications for those who are facing foreclosure.
Underwriters need to get some understandable, uniform guidelines in place! This grid of "add ons" to interest based on several points difference on the borrowers credit score is not helping the consumers. With all the desire for there to be transparency in the borrowing process, this is only muddying the waters. Perhaps I'm naive, but part of the problem with loose credit is that the people who shouldn't borrow to buy a home could. Now many who should be able to borrow to buy a home can't. Let's get back to some reasonable guidelines...not too loose, not too tight.
At this moment in time, consumer confidence in the economy, the administration, government as a whole is starting to peek out from behind the bushes and consider returning. It's a fragile thing, confidence, and it is encumbent upon all of us in the housing industry...agents, mortgage people, builders, etc...to be worthy of that growing confidence by being forthright, unselfish, knowledgeable and fair.
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