FHA..........FORGIVE & FORGET PROGRAM........President Obama please.....

By
Real Estate Broker/Owner with People first then business! Ran Right Realty Riverside, Ca BRE LIC #636943

We all know that the loan modification programs aren't working. They cannot work and were never designed to work....but that is another post. Consequently, foreclosures are here to stay, and will run their unnatural course leaving much destruction in their wake. How can you have a borrower who owes $400k on a home that is worth only $175k ever hope to catch-up or make sense out of the current investment they are in?

Real Estate has to correct itself and cannot be regulated. It runs on the principals of a ready willing and able buyer and seller to set values together with supply and demand to run profitably, efficiently and effectively. Interfering with this causes problems.....as we are now experiencing.....

The damage to the former borrower/homeowner is devastating. By this I mean that the credit scores and reports will now reflect a NEGATIVE for the next ten years. This will result in higher loan rates for some and no loans for others. Forget credit cards, purchasing of cars, appliances or at random shopping.......

The mental, emotional, psychological, spiritual and physical damage is here to stay and plays on the buying Psyche of the consumer at large. Happy people think differently than unhappy people. Take away hope from people and you get despair. If despair goes untreated, hopelessness kicks in. Hopelessness invites more crime and worsens the economic picture now as well as into the future.....

All this does is hurt Neighborhoods, Cities and the Nation as a whole. Do we really need more homeless, credit-less people who do not pay into the tax system? Of course not...........

Don't forget, even if prices correct over the years, many buyers will still feel alienated.

PROPOSED SOLUTION......PROPOSED SOLUTION......PROPOSED SOLUTION......PROPOSED SOLUTION

Home prices are so low that if people who were recently foreclosed upon were allowed to get FHA loans..... many would probably buy a house and make it a home......in a heart beat.

Lots of low income and middle class people got hurt this go around thanks in part to the banks and in part to the sub prime mess. THE RESULT: Values are down, credit is shot for the populations and we have taken out two responsible sectors out of the game. Even people who have employment who have been foreclosed on cannot play in the game anymore. Hundreds of thousands to millions of people will just sit out this next cycle who could have purchased. This hurts us all......

Forgive & forget......let them back into the game. Now, that is a program that would help everyone. It moves product, generates cash flows for a myriad of businesses, supports the selling and buying of Real Estate, aids in the market self-correcting, circumvents the free-falling foreclosure market and restores not only hope to families, but invites them to rejoin society and become homeowners which benefits everyone.......EVERYONE........

A good habit to have when describing a PROBLEM (or two) is to always have a solution to go with it. I have lambasted the banks, government, the economy and the greed of man in general in several of my blogs recently. So, in keeping with practicing what I preach, I offer my humble solution. I don't have all the answers, perhaps together, we can find them.

I submit this for your consideration and comments......................

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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Donald Bradbury 07/23/2010 09:03 PM
  2. Lori Liveston 07/24/2010 12:59 AM
  3. Tim Lorenz 07/24/2010 01:44 AM
Topic:
ActiveRain Community
Location:
California
Tags:
loan modifications
fha
help homeowners
credit reports
foreclosure solutions
lenders
banks
real estate
obama

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Rainmaker
1,318,193
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

Tim...my boy...you are a motivator and a truth sayer. You are absolutely correct.....and through discussion, dialog, conversation and even disagreement, ideas and concepts are born and then put into action. You are contributing to the process at this time. Thank you for the verbal stimulus......and if I am given the resources to accompany the vision........ it will happen!

Jul 23, 2010 10:43 PM #16
Ambassador
883,869
Lane Bailey
Century 21 Results Realty - Suwanee, GA
Realtor & Car Guy

Tim hit something.  There is no rule that a company couldn't fill that niche...  And if one company started doing it, others would have to offer a similar program in order to compete. 

Jul 23, 2010 11:03 PM #17
Rainmaker
648,639
William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

If I am understanding what Tim and Lane are saying, is that we could create a company that...what, buys up the mortgages that the banks won't reduce the principal and forgive the difference on, and then refinances those loans to the consumers at a fixed interest rate, thus alleviating the tide of pending foreclosures? Did I get that right? It does sound like something that could work, provided that someone had the capital and initiative to do it...

Jul 23, 2010 11:50 PM #18
Rainmaker
1,318,193
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

Lane.......Tim rules and his prompt has legs......and if it catches on, it would be a very popular way to make multi-billions or simply putting it.......lemons into lemonade....Operation Help Mortgage Yes..... OHMY or  Forgive Homeowners At once Program....... FHAP are just some quick thoughts....to get the juices flowing

 

Jul 23, 2010 11:56 PM #19
Rainmaker
1,318,193
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

William and MS Cutie......I am telling you......there is something here to take a second look at......and the best part of it is that it complies with KISS......Keep It Simple .......

Jul 23, 2010 11:59 PM #20
Rainer
70,388
Lori Liveston
Virtual Homes, Real Estate - Waltham, MA

Richie -  Great post!  The situation we are in has plenty of blame to go around (greedy banks, uninformed/misguided borrowers, fast talking real estate agents, risky loan officers, stock brokers, over their heads investors/flippers and on and on) and while homeowners share in the burden of blame, there is something that needs to be done about the homeowners who have been displaced.  Your solution sounds perfectly plausible to me!  Take out the black eye of foreclosure on their credit reports and see what they have left for credit.  If they still qualify, why not give them a USDA or FHA loan.  And if you want to restrict it (so it doesn't look like the government is giving hand outs... which I am sure there will be some squawking about) why not offer this to homeowners who tried to avoid foreclosure (attempted loan mods & short sales).

Jul 24, 2010 12:56 AM #21
Rainmaker
696,368
Pamela Seley, REALTOR®
REALTY EXECUTIVES OTF - Temecula, CA
Seals the Deals in Temecula Valley California

It may too late for some who have already lost their jobs, or work hours and paycuts.  Although great idea for investors to consider since their cash money is earning only 1/2 percent at best.  Interesting post, Thanks,

 

Jul 24, 2010 01:18 AM #22
Rainmaker
864,171
Tim Lorenz
TIM LORENZ - Elite Home Sales Team - Mission Viejo, CA
949 874-2247

Richie,

There are many answers to solving the problems of the housing situation.  Most of them easier than the path the government has chosen.  They just do not want to solve the problem.  This a doable situation but it will not get picked up.

Jul 24, 2010 01:39 AM #23
Rainmaker
113,289
Sun City Peachtree® Resales Jessica Horton
Jessica Horton & Associates - Griffin, GA
#1 Resale Agent in Sun City Peachtree®

I like what Tim said very much! Give me a free market solution over another government program any day of the week.

Jul 24, 2010 06:59 AM #24
Rainmaker
514,675
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX
Broker,CLHMS,GRI

"They cannot work and were never designed to work"

Sorry, you lost me at this as we are in uncharted waters and at least solutions are being offered for unique situations. It's easy to poke at things in hindsite but at least you've offered another idea which could work and I appreciate that. Write your congressman!

I don't agree with the knee-jerk opinions offer by Tim and Jessica, their ideas of a so called "free market" are what opened the way for the greed, dishonesty and avarice that led to this mess in the first place. But then again there are those who are blind even to hind sight!

Jul 24, 2010 08:52 AM #25
Rainmaker
449,831
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
The Agent Who Uses "Watermelon Tough" Sign Posts

Russell Lewis #25. Oh, so instead of letting people freely choose to create something to solve a problem and to provide a great service to help people in need, just come back with a knee jerk solution that this is a job only the government can solve.  I and others see that much of the problem was created due to government interference in the free market to begin with.  Who was keeping interest artificially low?  Who created a government sponsored entity that allowed much more risk to be let into the system due to implied government guarantees?  When government interferes with the pricing feedback mechanism, things usually get messed up. Market participants get faulty signals from government manipulated prices and we therefore end up with a lot of misallocated resources, ie. too many homes which are way overvalued for what people can actually afford.

All I'm saying is instead of using the force of government to force the population to do something to fix the problem, why not allow free Americans to choose to come together and implement a solution of their choice. 

Jul 24, 2010 09:30 AM #26
Rainmaker
1,318,193
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

Hi there Lori.......your comment illustrates that you caught the "spirit" of my post. The way you explain it, my point becomes even clearer.....thank you. BTW....."fast talking Real Estate agents"...are they still around?

Pamela....sure, it may be too late for those you describe, but now they have reason and motivation to move forward, to reach upward. We, in effect would be giving them a GOAL which is a achievable......something to reach up and out for....sounds like HOPE (the poor mans bread) to me....a good thing to prime or jump start anything......thank you

Tim Lorenz.....I am always reminded how easy it is to deal with private individuals than with big corporations. With individuals, you can try to connect and reason AND if successful, change follows forthwith...with large corporations, it is like a giant freighter at sea trying to make a U turn...it is slow and takes about 5 miles.....thank you

Jessica....it is people like you that should be in charge of change or solutions.....good attitude, to the point and being a poster child doesn't hurt.....thank you

Russell....fair enough on your comments.....I am not so sure it is hindsight as it is failure to complete a plan that was not known or tested under fire. When someone foreclosed in times gone by, the system worked. Heck, people made money from it and the borrower was thought not to be worthy of owning a home. This system was never tested on a production level. Now, it has been and it is flawed. THINK: Judges have long known that if you do not give lawbreakers a chance to re-enter society, it is not only them that suffers, but society as a whole. This came about after statistics revealed that 2/3 of the American public has some sort of arrest record. Now, we are repeating the folly in the mortgage industry by blacklisting millions of people who will not be buying anytime soon. How does that help anyone? BTW, I wrote both my Senators, received pat political answers and this was 3 years ago. The tone of my writing was "begging" them to intervene before things got worse. I want to thank you for your comments and I will let Tim & Jessica respond if they care to........BEST

 

Jul 24, 2010 09:46 AM #27
Rainer
59,286
Kim Nolan
Century 21 - Mike Ham & Associates Worth IL - Worth, IL

There is a program doing exactly what Lenn suggests.  I learned about it last year through an attorney that had a client receive a 100,000 reduction of the principle amount of their loan.

It is NACA ..(Neighborhood Assistance Corporation of America).  It is a non-profit advocacy & Hud certifiied counseling agency.  

Visit NACA.COM and check the Home Save Program...

Check it out...interesting and good to know about.

Kim  :-)

 

Jul 24, 2010 10:38 AM #28
Rainmaker
1,318,193
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

Kim...good contribution to the post.........thank you

Jul 24, 2010 11:10 AM #29
Rainmaker
113,289
Sun City Peachtree® Resales Jessica Horton
Jessica Horton & Associates - Griffin, GA
#1 Resale Agent in Sun City Peachtree®

No offense, Russell, but greed and dishonesty are conditions of the soul...not of an economic system.

Jul 24, 2010 11:41 AM #30
Rainmaker
1,318,193
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

Jessica.......I am giving you a standing ovation....for the precision of the comment....

Jul 24, 2010 11:53 AM #31
Rainmaker
136,140
Jenna Dixon
DRA Homes (Atlanta, GA) - Marietta, GA
Associate Broker, NW Metro Atlanta

US v. THEM...Your post about VOTING with our paychecks and our feet moves the power to the powerless.  When will we ever learn that while THEY have the money, it is due in large part because WE continue to give it to THEM. 

I am for the forgiveness program idea.  We do need a major shift in the social consciousness...a new understanding that MORE IS NOT ALWAYS BETTER and often results in a NET LESS!

Jul 24, 2010 05:33 PM #32
Rainmaker
1,318,193
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

Jenna...the prestige of the post has increased due to your comments.......thank you

Jul 24, 2010 05:40 PM #33
Rainmaker
514,675
Russell Lewis
Realty Austin, Austin Texas Real Estate - Austin, TX
Broker,CLHMS,GRI

Richie Thanks again for a post that stimulated discussion and I like your well put thoughts and ideas. Though we may not agree on every single issue, I doubt that we are all that different in the grand scheme of things. Have a good weekend!

Jessica - No offense taken and I completely agree that "greed and dishonesty are conditions of the soul" . Your point is well taken. Unfortunately, unregulated laissez faire capitalism has a tendency to bring out these conditions to the detriment of others over and over through history and in our case on a national level. It' crosses all party lines and ideology so no one is right all the time. Though I am one of those somewhat naive people who still believe that human beings on the whole are good, the reality is that there are always folks around who want to take advantage of others for personal gain. There will always be some sort of struggle for balance but it seems like the only time we find it is for a brief time when the pendulum is swinging past that midway point. ;-)

Tim I am not sure why you seem to take it on yourself to repeatedly attempt to call me out and  to convince me of your ideas. Frankly it makes my head hurt to try and think down on your level. Let's just agree that we have opposing opinions on nearly everything and just leave it at that!

 

Jul 25, 2010 11:49 AM #34
Rainmaker
1,318,193
Richie Alan Naggar Author PEARLS SERIES of books
People first then business! Ran Right Realty Riverside, Ca - Riverside, CA
on LIFE and LOVE plus Real Estate too!

Russell...welcome back......I do not expect to agree with people, but I do require that we meet, greet and dialog so that we may come to understand each other and what we believe in. If we do agree, fine. If not, fine too! I am just happy for the interaction.......thank you my friend...

Jul 25, 2010 12:35 PM #35
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