Holding back the tide of falling Real Estate values is a noble, valuable and necessary approach to our economic woes. There is little doubt that something had to be done and rather quickly. Whole neighborhoods and regions were looking at the spectre of disentegrating housing and commercial Real Estate values…based on the coming wave of APR Resets and the resulting foreclosures that would follow.
President Obama today made the issue a bit clearer, by suggesting that it was time for the Federal Government to step up to the plate and assist those that wanted to keep their homes. The idea is good. Reduce the monthly out of pocket required to stay in her home. Make it relate to “the primary residence” rather than the second or third home! Find the people who need the help directly. It all sounds very intelligent and helpful. The caveat of making sure that the original value of the property remains as part of the assistance package….means that when the property is sold……the entire original amount of the loan would be due. This insures that only people that truly want to keep their homes…will want to play.
The huge gorilla in the room: The Presidents programs will require a priority system. It will mean that areas most affected by foreclosure should be the first served. A good example is Stockton, California. Riverside and San Bernardino, San Diego, several areas in Florida, Pennsylvania, Illinois and more. We call for an oversight board or committee that targets areas based upon the regional need. The areas need focus and resolution directives.
Simply stated, we need to determine the areas most needy and fix those first. Hopefully, for once the Government will have a plan….not just a directive! Whether it is Freddie Mac, Fannie May or AIG…….the lenders and refinancing agencies need to target their efforts so that an entire area is repaired….rather than hoping that some helter skelter thought process is going to heal the wounds. The example might be that South Florida or Northern California are stabilized….then efforts move on the next most needy!
All in all, we approve of the President’s plan…..now as “Ross the Boss” might say: “The Devil is in the details…..and the results required!”
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