Have you ever heard this phrase?  There is quite a bit of truth to it in my opinion.  Since Blog’s are opinion’s here’s mine.

First of all, I am specifically talking about the common sense adage “I don’t care who caused the problem, fix it!”

   Relating to the economy and the housing market I believe the “Ivy Leaguers” in Washington have forgotten this. A fellow Realtor said this morning that he just sold a 3000 Sq. ft. home with a guest house for $90,000, he said it would cost you $400,000 to re-build it and that it was a great time to buy!  He is absolutely right. It is a great time to buy, I have sold properties for similiar values, so even if the market is still declining and mortgage rates go up then your monthly payment will be the same, so the “buying power” is equal.  You can’t possibly go wrong buying a house of that value, correct?

However…

This is a HUGE problem!  If the banks do not stop foreclosures, that house may very well be worth $50,000 two years from now!  Since 70% of the loans are held by government backed Fannie Mae and Freddie Mac then guess who could fix this problem? And guess who this is costing? Yet I have not heard one word about fixing this issue from any Congressmen, Democrat or Republican, the housing market was not even mentioned in the State of the union address.  Do they realize how much of the economy and the job market is tied directly to housing?  You here alot about the problem and who one person or the other thinks caused it, but no solutions.  Not this time…here is the solution.

If you can’t make your mortgage payment then allow the homeowner to modify there mortgage or sell, with no derogatory credit mark.  Have an appraisal done by a licensed appraiser, if you can handle the payments from that principal balance then start making those payments and stay in your home if you can’t then sell it for that value.  Foreclosures stop the next day and the housing market starts to appreciate again because all of those buyers that are waiting for the market to stop dropping pour into the market.  Supply drops, demand raises and prices start increasing again, this will create a need for tons of companies to start hiring again.  Think about how many jobs are needed to handle one home purchase, Real Estate sales, banking, insurance, all service related fields including a/c (and heat for my northern friends), plumbing,  roofing, electrical, home improvement stores, furniture stores, I could keep going but you get the point.

But that would cost the government (taxpayers) and mortgage investors billions, right?  So you mean it is not costing them even more now in attorney’s fees (I heard that FNMA spends $160,000,000 per year in attorney’s fees) to handle the foreclosures, lack of people paying the mortage for the 2-3 years that it takes to foreclose here in Florida, and the fact that the homes are a wreck by the time they are up for foreclosure sale and sell for 25% of what they are worth?

This might just work…or maybe we can just build some really fast trains!