The American Housing & Finance Crisis is a far-reaching epidemic affecting Millions upon Millions of Americans. It goes beyond Our borders. Internationally, directly and indirectly, the American Housing Crisis has reached as far as Europe, United Emirates, China, Japan and Many other “Foreign Investor” interests in Countries all over the World. We all know what happened, we have a pretty good idea what it’s going to take to correct things and avoid this from ever occurring again. What we need now is not amnesty or “bail-outs”… but PATIENCE.

It has been estimated by American Core Logic that the average American Homeowner experiencing negative equity won’t see positive equity appreciations until 2015! In depressed markets like Las Vegas, Detroit and Florida, it may take as long as 2020 until homeowners can benefit from the stake-hold they have in their home-ownership rights.

The White House recently made some sweeping changes in the HOME AFFORDABLE MODIFICATION PROGRAM amidst growing criticism from opposing Party Members and the American Tax Payers. The program itself has been funded with $75bln Dollars as a way to help Troubled Borrowers with a Cash Subsidies directly paid to Banks and Servicing Banks. Many of the critics have cited that not enough is being done to reach out to the Borrowers and more proactive steps from the Banks and Servicer are necessary to quell concerns and bolster active participation by the homeowners. In a report from the US Treasury, some 52% of the Homeowners benefiting from the HAMP Program default yet again within 9 months of approval. The issue is not the relief, but the hopelessness of any future equity gains as the program is a band-aid and not a cure.

The cure will come from the Banks willingness (albeit voluntary or mandated) to make principal reductions to give the homeowner a “light at the end of the tunnel”. Let’s face it, most homeowners would just soon walk away from an upside down mortgage and property and seek another one with positive equity and positive equity appreciations. DUH! The good news is Home Affordable Modification Program now provides:

  • Monthly Cash Subsidies Paid Directly to the Bank/Service Providers
  • Annual Principal Reduction Payments Predicated on “On-Time” Payments by the Borrower (s)
  • Policies Requiring Lenders to “Proactively” Screen Their Portfolios for “High Risk” Defaults and Make Available Options for Resolution
  • Payment Deferment for Jobless Homeowners for Up To 3 Months
  • Automatic “Stay” on Foreclosures for Homeowners Applying for or Participating in a Loan Modification (Becomes Effective June 2010)
  • 2nd or Junior Lien Modification Program to Assist Homeowners

Among these sweeping changes, Banks have pledged to review and analyze their respective portfolios and “shave” principal balances that directly benefits individual homeowners with the negative equity challenge.

“Change” takes time, and as more and more Banks & Financial Institutions realize the fiscal sense in reaching out and “preserving” the current payment streams in their portfolios; which creates more money to lend out and remain capitalized. The better off “We” Homeowners will be… soon markets will begin to stabilize & correct and neighborhoods & municipalities will begin to experience an increase in tax base revenues to fund infrastructures. In the end and if we play our cards right, we may see better times for ALL ahead of us…

BUT! Please remember all this is ONLY Possible with Patience, Resolve and a real passion for “Getting Past This Current Situation”. Hang in there America… “This too shall pass”