BLOG: Can you have the American Dream in West Hollywood?

Homeownership isn’t for everyone as the past few years have proved resoundingly to every city and state of our nation but especailly in SoCal.  The ‘mythical homeownership dream’ has been sold to everyone no matter their salary, background and ability to maintain the property and this cycle must be ended. 

To put it simply not everyone is an appropriate candidate for homeownership.  It’s for a variety of reasons from the costs of purchasing a home, maintaining the property and the mindset needed to own one’s own home. 

Now in case you wonder what I mean by the necessary ‘mindset’ is what they think of when they begin the process.  Often when people talk about buying a house they look like they speak of their home in fantasy language. 

It’s a ‘I deserve’ mantra that always seems to be a ‘McMansion’ with marble on every surface, huge closets as big as a bedroom, huge bathrooms with all the bells and whistles.  Nothing less will satisfy despite tha tmore often than not these people are living out a caviar dream on a Pabst Blue Ribbon Beer salary!   

Individuals are going to have accept the reality that most people will never own their own home especially if they live in major cities (for instance NYC, Los Angeles, Washington, DC, etc.,) and are unwilling to downgrade their house dreams. 

It’s time to reset the HGTV mindset of what a home should and can be.  I personally LOVE HGTV and consider it my dirty little secret ala houseporn that I watch a few times a week.  I become giddy over the giant kitchens with the professional grade appliances, the bathrooms with showers that look like a spa or torture chamber, the family cave with huge projector and seats that cushion your rump! 

Who can resist the siren call of the closet bigger than a bedroom???  I certainly can’t and if I were rich would have all that and more!  I don’t blame HGTV but instead the attitude of ‘I want I want’ and unscrupulous mortgage lenders who enable unqualified people to live their greedy dream of homes they can’t afford.

As the economy improves and if interest rates increase I believe that people will again buy more than their bank account can support so I am looking towards the government to be the parent to say ‘NO’ to the lenders and individuals.  We need to reenact regulation to protect not just individuals, banks and more importantly our economy from another brush with another depression. 

The Obama Administration has three programs that will take effect later in the year to assist with the glut of houses that are in the foreclosure process in serious delinquent mortgages and that are bank owned but not currently listed for sale. 

The three programs are HAMP, HARP and the Pilot REO Property Sales in select areas of the continental United States.  The three programs will benefit homeowners and landlords but are not geared towards individual buyers who didn’t take advantage of the easy loans from the past decade. 

Home Affordable Modification Program (HAMP)

If you're not unemployed, but you're still struggling to make your mortgage payments, you may be eligible for the Home Affordable Modification Program (HAMP). HAMP can lower your monthly mortgage payment to 31 percent of your verified monthly gross (pre-tax) income, which usually provides savings of hundreds of dollars per month.  Making Home Affordable is planning enhancements to the HAMP Program. Detailed information was made available for mortgage servicers in February 2012. The expanded program for homeowners is expected to be available at the earliest in June 2012.

FHFA Announces Pilot REO Property Sales in Hardest-Hit Areas

The Federal Housing Finance Agency (FHFA) has the first pilot transaction under the  Real Estate-Owned (REO) Initiative, targeted to hardest-hit metropolitan areas — Atlanta, Chicago, Las Vegas, Los Angeles, Phoenix and parts of Florida.  With this next step, prequalified investors will be able to submit applications to demonstrate their financial capacity, experience and specific plans for purchasing pools of Fannie Mae foreclosed properties with the requirement to rent the purchased properties for a specified number of years.  The forms are available on the FHFA REO Initiative page.  Bidder Qualification Form PDF and Investor Pre-Qualification Process.

Home Affordable Refinance Program (HARP)

HARP is designed to help you get a new, more affordable, more stable mortgage. HARP refinance loans require a loan application and underwriting process, and refinance fees will apply.  For a mortgage to be considered for a HARP refinance, it must be owned or guaranteed by Fannie Mae or Freddie Mac. 

References:   Streamlined Refinancings for up to 30 Million Borrowers By Alan Boyce, Glenn Hubbard, and Chris Mayer (9/1/2011) http://www.glennhubbard.net/images/stories/pdfs/StreamlineRefinancing.pdf   Mass refinancing: The ‘biggest thing’ Obama can do without Congress Posted by Ezra Klein
http://www.washingtonpost.com/blogs/ezra-klein/post/mass-refinancing-the-biggest-thing-obama-can-do-without-congress/2011/08/25/gIQA8RG1nP_blog.html   Deregulation and the Financial Crisis by Robert Weissman | Huffington Post (January 22, 2008)   http://www.huffingtonpost.com/robert-weissman/deregulation-and-the-fina_b_82639.html