Monday, August 20, 2012

Stop Spending, what a concept!

I was reading the following article and had to stop because I was so frustrated.  It refers to Senators and Representatives coming up with  3 bills to fix America's housing problems.  First, I need to say that I think the government has done enough and they need to back off and let housing fix itself.  The investor's had removed certain loans, and had tightened up underwriting before the government came up with the HVCC rules, the Frank/Dodd bill, the HAMP, HARP, and several other bills.  HVCC made it so that loan officers were not to speak to the appraiser to influence their opinion of value.  This has increased the costs of the appraisals to the client along with increasing turn times.  It has also reduced the income received by they appraiser, but it did start a nice little 3rd party servicing company opportunity referred to as Appraisal Management Companies.  Not what our industry needed, but helped create jobs I guess.  Then the Frank/Dodd rulings, coming from two men who both obtained loans from Freddie Mac fraudulently, nice.  HAMP and HARP were designed for delinquent borrowers and non-delinquent borrowers (respectively) to try and save or refinance their underwater home instead of turning to foreclosure. 
Here is what I would like the public to know.  The first HARP program was not successful.  It had to many limitations and especially in the San Joaquin Valley our values had dropped so significantly that the program didn't have a chance.  In October 2011, HARP 2.0 was rolled out, but guidelines were not presented until December and investors didn't start lending until March.  In the article it states that 423,000 people have been helped in 2012, but in essense that number really didn't start until April.  Now they want to revamp the program to help more people.  Let's just give it a full 12 months before we start throwing more money and time at  something that has really just kicked off.  And Senator Feinstein, FHA has something called an FHA Streamline.  We don't get an appraisal, if the FHA client is on time, and is working we will refinance their loan.  We don't need $6 billion in a fund to insure those loans, FHA already has the money. 
I was discussing the upcoming election issues with my daughter and her idea was just stop tax cuts, and start doing what we are supposed to do.  The elderly should not have to worry about their medicare benefits. 
I asked her, what about keeping tax cuts that will eventually benefit more people because there will be jobs created and just stop spending.  When I saw the bill from Senator Feinstein stating to just fund $6 Billion to insure it made me crazy.  Where are those funds going to come from?  Increased Upfront MI and monthly MI factors...great then we will see less and less people refinance or purchase.  For every action there is an equal and opposite reaction.  We need to stop spending, we need to audit our books and see where there is waste.  It is not at the schools because we have them on shoestring budgets, it is not in the counties (except maybe the high end) because all programs are being trimmed and the offices are running on skeleton crews who keep taking cuts to their pay to keep their jobs. 
I don't mean to rant, but when a homeowner is feeling the pinch, they cut out bills, or lower the ones they have, Full cable to Basic cable, Unlimited usage of the phone to set minutes, get rid of the home phone, don't put the Air Conditioner on until after 7pm, eat in, purchase inexpensive foods-generic, rent videos, etc...Our government needs to learn how to cut back, we need to trim the fat, and save our country.  We don't need new bills, we just need to be frugal.