Housing Doom Housing Bubble Blog

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I’m crawling out from behind my computer for a couple of media appearances.

Tomorrow morning I will be visiting with Charles Goyette on his morning radio show at 8:00 a.m. PST.  If you are in the Phoenix area, you can listen on 1100AM, or you can listen on the internet here.

I will also be on Channel 12′s "Sunday Square-Off" show here in Phoenix  August 19 with Brahm Resnik.  This week’s panel discussion will be have a three-member panel [including yours truly] discussing home sales, foreclosures, mortgages and where the market is heading. The show will air locally in Phoenix at 8:00 a.m. I haven’t heard yet who else will be on the panel, so this could be interesting. [This will be a different experience for this blogger.  I might even change out of my usual highly casual garb.  Dooms dress code has always been come as you are!]

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Lots of folks have suggestions for what the president should do about the problems in the housing market. On August 12, Doom reprinted an article by Bill Maloni who encouraged President Bush to "Get on the bus."  He suggested to the President:

Wouldn’t a combination of the Fed ”priming” and Fannie and Freddie providing billions in liquidity look pretty good right now?

Today on Broker Outpost, a mortgage broker [bnovoryta] posted an Open Letter to the President.  He also had a solution for the President:

Allow existing borrowers who cannot: make payments solely due to rate adjustments; or refinance due to a decline in local property values (LTV >100%), to refinance into one loan with a 30 year fixed rate at 8%. No cash out allowed to prevent abuses by borrowers, and fixed fees to prevent abuses by financial providers. No prepayment penalties allowed for new or old mortgage payoffs (existing investors benefit from this safe harbor v. foreclosure).

Mortgage insurance at a fixed rate (ex: $100/mth per $100,000) is required for the portion of the loan over 80% LTV (loan to value), as are tax escrows.
Any credit score is eligible. Borrowers must “prove their income” (W2’s, or bank statements for self employed) and ability to make their new payment.

Allow the existing infrastructure (lenders, brokers, title & mortgage insurers, and investors) to participate and administer this program. They must adhere to the low fees and conditions established by the US government. The government would audit compliance, and most importantly: Re-insure the mortgage insurance providers, if and when losses exceed insurance premiums.

By far my favorite letter to the president though, was written by another broker, [Mortgage321321] further down the "Open Letter" thread:

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