PEOPLE BOUGHT TOO MUCH HOME - Hmm, Really, that's the problem?
As I read comments each day from blogs, facebook or editorials, I still often see the comment that "people bought too much home" or people "were living beyond their means" and now are paying the price for the extravagance.
If that is the case, not only are these home owners paying the price, so are Realtors and Mortgage Loan Originators. Our economy will be suffering for years to come and I for one, don't think the biggest problem is people who bought too much home.
When I hear the comment "they bought too much home", I get a little aggravated that such a broad brush is being used to describe the housing mess.
The biggest contributor to the continued housing problems is unemployment. Did people set out to buy too much home and just stop paying for it? No, people lost jobs and could not pay for homes. Homes have lost value, leaving owners fewer options to either refinance or sell the home, particularly coupled with unemployment or underemployment.
When programs were developed to help underwater home owners and loan modification programs, they failed because lenders put home owners through the paces for months on end and then turned them down. Add to this the terrible timing of HVCC (home valuation code of conduct) appraisal disasters and the LLPA's (loan level price adjustments) by Fannie it is clear these things have hindered home owners.
We've wasted valuable time in trying to help home owners who are either upside down in their homes or just struggling to get by on less income. I see it every day in my job; I get calls from home owners to refinance and they have had to file bankruptcy due to lost income and now their opportunity get a lower interest rate and ultimately stay in their home has passed them by.
Did people buy too much home? Absolutely some, somewhere did. As to my personal experience, I can only think of a sprinkling of these; the majority of problems I see every day is loss of income. I'm struck by the callousness of the statement "they bought too much home". These are real people, real families.
I would love to know how many people agree with me.
