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Home Buyer Tax
Credit Extended
Foreclosure Counseling Works, Study Shows
FTC and Homeowners Win in Latest Federal Competition Case
Thanks should be given for November’s noise
Homeowners Ask for More Broadband Internet Access
Government Will Rent Homes Back to Foreclosed Owners
Home Buyer Tax
Credit Extended
Good news for sellers and buyers will help stabilize home
values.
On November 6, President Obama signed legislation
extending the first-time home buyer tax credit until April
30, 2010. The measure also created a new $6,500 home buyers
tax credit that can be used by most current homeowners. The
American Homeowners Grassroots Alliance had strongly
supported the extension, and many AHGA members responded to
our legislative alerts and pressed their Senators and
Congressman to support the measure.
“This extension was badly needed, and it comes at a time
where there is a great likelihood that it will help
homeowners and the economy,” observed AHGA President Bruce
Hahn.” Recent data has shown that the number of home
foreclosures continue to increase, and home prices in many
areas continue to drop (nationally home prices have dropped
7.1% from October 2008). The silver lining to that sobering
data is that mortgage interest rates today are near record
lows, and home affordability indexes are now near the best
they’ve ever been. As a result of these favorable market
conditions, a large share of home buyers who respond to the
stimulus should be able to qualify for a mortgage. If the
tax credit has its intended effect, the increased demand
will both help stabilize home values and reduce foreclosure
rates.”
The legislation will extend the first time buyers tax
credit without interruption to apply to home purchases that
go under contract by April 30 and close by June 30, 2010. To
speed payment of the credit, taxpayers will have the option
of claiming the 10% credit for 2010 purchases (subject to an
$8,000 cap for first time buyers and a $6,500 cap for
replacement home buyers) on their 2009 tax returns, which
means they won’t have to wait long for the money.
The 10% credit will also be expanded to include buyers of
primary residences who aren’t first time home buyers. They
would be eligible for up to a $6,500 tax credit if they have
owned a home for at least five consecutive years during the
previous eight years prior to the purchase. Homes that cost
less than $800,000 would be eligible for the credit. Income
eligibility limits will also be raised for the credit. The
credit will be limited to those with annual incomes of no
more than $125,000 for singles and $250,000 for couples.
This is a substantial increase over the current $75,000
single/$125,000/couples limit.
“Most American homeowners earn less than the new income
limits, so lots of them will be eligible for the credit,”
according to AHGA’s President. “The credit can amount to a
significant part of a home’s cost in areas where home prices
are low. Some of them, such as south Florida and Nevada,
have been hit hard by the housing recession so the extension
and broadening of the credit should be especially helpful in
those areas. However, because of the cap on the credit, it
will likely have lesser impact in parts of the country where
home prices are higher.”
In recent hearings in the U.S. House of Representatives,
Treasury Department officials reported that the IRS had
identified 167 criminal schemes and began nearly 107,000
reviews regarding potential misuse of the original credit.
To address these concerns the extension of the home buyers
tax credit includes provisions to clarify eligibility and
combat tax fraud surrounding the buyer’s tax credit.
Dependants aren’t eligible for the credit, and there are
other restrictions that limit its application. There are
also exceptions to make the credit fairer to military
personnel. All home buyers should make sure they
understand the fine print in the new law before making
purchase offers so they don’t get tripped up by any of the
new restrictions.
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 Foreclosure Counseling Works, Study Shows
An independent study of the National Foreclosure
Mitigation Counseling (NFMC) program by the
nonprofit Urban Institute has shown that foreclosure
counseling has a substantial positive impact in
avoiding foreclosures, curing foreclosure problems,
and obtaining loan modifications.
The National Foreclosure Mitigation Counseling
program was established in late 2007 to help reduce
foreclosure rates. Under the program about 1,700
nonprofit housing-counseling agencies have received
approximately $300 million since December 2007.
The NFMC program is administered by NeighborWorks
America, itself a nonprofit organization. The Urban
Institute study of a sample of close to 61,000 loans
determined that
● The NFMC program
reduced the likelihood that counseled
homeowners would end up in foreclosure by
about 18%. Urban Institute estimated that
the program helped approximately 880 clients
out of 4,975 avoid foreclosure through
December 2008.
● The NFMC program
was helpful in curing foreclosures NFMC
clients already in foreclosure when they
entered counseling or who entered
foreclosure after starting counseling were
about 1.6 times as likely to get out of
foreclosure, and avoid a foreclosure
completion, than other homeowners who not
received NFMC counseling.
● NFMC clients who
received loan modifications reduced their
monthly payments by an estimated $454 more
than they would have without NFMC
counseling.
As the results demonstrate, foreclosure
counseling can’t save all homeowners from
foreclosure. Unfortunately a majority of homeowners
failed to achieve their objectives in each of these
categories, even with counseling. Nevertheless, the
American Homeowners Foundation still believes that
the program, which is free to homeowners, is a
useful tool that all homeowners threatened by
foreclosure should consider. “The program has helped
a lot of homeowners, and any homeowner facing
foreclosure should consider taking advantage of this
free resource,” said American Homeowners Foundation
President Bruce Hahn. “The program’s ability to
prevent avoidable foreclosures is undoubtedly better
than the figures suggest when you consider that in
many of the cases the homeowners’ circumstances were
so dire that there was no way a foreclosure could
have been prevented.”
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FTC and Homeowners Win in Latest Federal Competition Case
 Hopefully real estate brokers will finally give
up on this scheme in the future.
On November 2, the Federal Trade Commission
issued an Opinion finding that a southeast
Michigan-based realtors’ group violated federal law
by restricting the ability of member real estate
agents to offer consumers lower-priced alternatives
to traditional real estate services. Both the FTC
and the American Homeowners Grassroots Alliance have
long opposed these types of restrictions, which
other multiple listing services (MLSs) have also
unsuccessfully attempted to impose. The vote of the
FTC Commissioners was 4 – 0. The decision was
critical because it was the outcome an appeal of the
only previous decision the FTC had lost. AHGA was
the only organization to file a
third party brief
on the appeal.
Recent years have seen significant changes to the
real estate markets. Some real estate brokers have
discounted their fees by offering lower commission
rates, accepting flat fees, or unbundling real
estate services that used to be available only as a
package. These limited-service models typically are
less expensive than the traditional real estate
model, allow consumers to customize a package that
best fits their needs, and have put pricing pressure
on more expensive full-service brokers. In some
cases the cost differences can be dramatic. A 6%
commission on a $200,000 home – close to the average
U.S. selling price today – amounts to $12,000. Some
“flat fee” discount brokers will list sellers’ homes
in their local MLS for a few hundred dollars.
MLSs are real estate broker membership
organizations who maintain databases of homes for
sale in their area, which they feed to the
consumer-facing websites of all of their members. As
a result the listing of a home seller will
simultaneously appear on the websites of all the
member real estate brokers in the area. Because most
real estate brokers belong to their local MLS, and
about 85% of home buyers now conduct their searches
on the Internet, getting your home into the MLS is a
critical marketing tool for most home sellers.
As the Internet has grown in importance to the
marketing of homes, a number of MLSs developed rules
that had the effect of denying participation to
member real estate brokers whose fee structures are
substantially less than traditional brokers that
typically charge commissions in the 5-6% range. Both
the FTC and AHGA viewed the rationales offered by
the MLS’s for their policies as transparent efforts
to limit competition. The FTC has challenged all of
them and prior to this case all of the MLSs either
withdrew the policies voluntarily or were forced to
do so by the courts.
Realcomp II, a Michigan MLS, refused to transmit
discount real estate listings to its own and other
publicly available Web sites and excluded such
listings from the default searches within its own
database. In this appeal decision the Commission
found that these policies restricted access to these
listings and harmed competition. The FTC’s Final
Order requires Realcomp to provide its members
non-discriminatory access to non-traditional and
lower-price listings on its Multiple Listing Service
(MLS) and to stop preventing such listings from
being sent to its public real estate sites.
In its Opinion, the Commission found that “the
practices at issue improperly limit consumers’
access to information about the availability of
these lower-priced alternatives,” and concluded
“that [Realcomp’s] acts and practices unreasonably
restrain trade in violation of Section 1 and Section
5 of the Sherman Antitrust Act.” The Commission’s
administrative decision resolves litigation arising
from a complaint charging that Realcomp’s policies
violate Section 5 of the Federal Trade Commission
Act.
The Commission found that full-service real
estate brokers, who make up a majority of Realcomp’s
membership, saw the combination of discount brokers
with the public availability of MLS listings via
Internet Web sites as a serious threat to their
business model. In turn, Realcomp established
policies that limited the effectiveness of discount
brokers’ listings. Although the MLS began providing
the public with information on homes available for
sale by establishing a public Web site and
transmitting listing information to other Web sites,
such as those of the National Association of
Realtors (NAR) and of its members, Realcomp provided
only the more expensive, full-service listings to
the publicly available Web sites. As a result, a
buyer searching Realcomp’s public Web site or the
NAR’s Web site, for example, would not see listings
offered by discount brokers.
Furthermore, within its proprietary database, the
default search policy excluded listings of discount
brokers. So, unless a broker searching the MLS’s own
private database changed the default search
settings, the broker would not see discount
listings.
The Commission found that Realcomp’s policies
narrowed consumer choice and hindered the
competitive process. In reaching its decision, the
Commission reversed a 2007 decision by the
Administrative Law Judge dismissing the charges
against Realcomp.
The Commission’s Final Order forbids Realcomp
from discriminating against discount brokers in,
among other things, determining what listings it
transmits to public Web sites or setting its default
search criteria. The Order also requires Realcomp,
within 30 days of the Order becoming final, to amend
its rules and regulations to conform with the
Order’s provisions, and, within 90 days, to inform
its members of the amendments and provide each
member with a copy of the Order. Finally, it
requires Realcomp to place a statement on its Web
site announcing the amendments and to modify the
site to include the updated rules and regulations.
The decision is good news for consumers. It will
hopefully discourage any more MLSs from trying to
follow Realcomp’s example. Lower selling costs for
consumers may be the only alternative for many
homeowners who owe as much as their home is
currently worth, and do not have enough extra cash
to pay a full 5-6% commission.
The FTC and the Department of Justice along with
AHGA have also fought other regulations and laws
imposed at the behest of state and local real estate
brokerage groups to keep the cost of real estate
transactions as high as possible. Among them are
laws and regulations prohibiting real estate brokers
from providing partial commission rebates to home
buyers. In part because of the scarcity of buyers,
rebates are another growing practice in the real
estate services sector. Like the first time buyers
tax credits that were recently extended, these
rebates also make homes affordable for more home
buyers and can help mitigate the current housing
crisis.
Many of the state anti-rebate regulations were
generated by state real estate commissions, whose
membership is often dominated by full service real
estate brokers. The competition agencies and AHGA
have been successful in reversing such policies at
the regulatory level, but some have made it into
state laws. Those laws will have to be repealed
legislatively, and New Jersey is presently
considering the repeal of its anti-rebate laws.
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Thanks should be given for November’s noise
Our favorite country philosopher, Curtis Seltzer, offers
up his thoughts on Thanksgiving and crowd control.
BLUE GRASS, VA.—The guns of November always herald
Thanksgiving.
We are in the middle of rifle season for deer.
Muzzle-loading season is behind; other seasons are ahead.
But these two weeks are THE BIG DEAL—school kids get time
off, businesses shut down and a handful of shiny,
out-of-county Hummers wad up outside the Mountain Hideaway.
Here a ka-boom, there a ka-boom, but not everywhere a
ka-boom boom.
The hills are not alive with the sound of gunfire, and I
wish I heard more.
Why? It’s simple: We have too many deer, particularly too
many females—a gender that I generally like a lot.
Unlimited hunting reduced America’s white-tail deer
population to about 300,000 in the 1930s. Today, the herd is
estimated at about 30 million, and much of our hunting
focuses on big bucks with big racks.
Deer have become pests in many places—the countryside,
suburbs and cities. They’ve lunched in Central Park and
called on the White House. They’re gorgeous, graceful and
inspiring; they’re also dangerous, destructive and costly.
They cause an estimated $2 billion in annual damage to
forests ($750 million+), crops ($100 million+), landscape
vegetation ($250 million+) and vehicles ($1 billion+ in
repairs, 1.5 million crashes, 14,000 human injuries). They
host ticks that carry Lyme disease.
White-tail deer (Odocoileus virginianus) thrive
east of The Rockies on open-and-wooded land, particularly
where they become habituated to people and are not hunted.
Suburbs provide palatable and nutritious food with no
predators. Deer do best on developed land, not old-growth
forest. Backyards, golf courses, parks, power-line
easements—it’s easy for them to make a living off modern
American life.
Deer are too abundant around here for everyone’s good. In
my woods, they browse off the defenseless maple, oak and
cherry seedlings that my 24-year-old daughter is counting on
for her retirement. If you see a browse line about five or
six feet high on trees in early spring, it’s a signal that
too many deer are competing for too few meals.
I’d guess that we now have as many as 40 to 50 deer per
square mile, when 20 or fewer is the better rate from an
environmental perspective. Some suburban hot spots count
more than 100 head per square mile. Ten to 15 is the
estimate for pre-European America.
When Melissa and I moved to tiny, rural Blue Grass more
than a quarter-century ago, deer were around, but not
plentiful and certainly not underfoot. Today, eight have set
up in my back pasture, sleeping in a small patch of scrub
woods next door. Next spring, those eight could easily be
20.
Deer are like the Sorcerer’s Apprentice in Goethe’s poem,
Der Zauberlehrling. Deer can’t stop copying
themselves, just like the magician’s broom can’t stop
fetching water into a flooded house.
Left alone, deer will reproduce to the point where they
exceed the ability of their habitat to sustain them. Then,
they starve. But before that happens, they inflict long-term
damage on trees, forest health, plant diversity and
ground-dwelling birdlife as they eat everything that’s
edible.
Responding to the near disappearance of deer from
over-hunting, states began rebuilding their herds before WW
II. Hunting seasons were shortened, and “bag limits” -- the
number killed -- were imposed per licensee.
Limiting the doe kill increased herd size. Females can
produce as many as 20 offspring over a normal life span and
usually have twins.
Today, bag limits should be raised because we have too
many deer. Current limits are outdated and dysfunctional.
They don’t maintain herds at sustainable levels.
Many hunters, perhaps most, prefer more deer to fewer. A
policy that reduces deer populations to sustainable levels
would encourage taking more does. From the hunter’s
perspective, does are less interesting even though they are
better eating.
One out of six Americans -- 17 million households --
reported having had trouble putting food on the table last
year. It seems that government could help in a small way to
solve two problems with one policy.
Many communities have programs for hunters to donate deer
for processing and then distribution to needy families.
State and federal policies could provide tax incentives or
even direct payments to hunter-donors. They could also be
rewarded with higher bag limits, especially for does.
Hunting for herd control rather than hunting for racks is
more effective than most options for reducing deer
population. It is not without risks, especially in suburban
areas. But the alternatives -- habitat management, fences,
bioengineering, repellants, etc. -- are usually too costly,
unwieldy or ineffective.
People who don’t hunt often fear and belittle those who
do. They might object to killing animals, or feel funny
about shooting Bambi. They are disturbed by gunfire. They
don’t like the idea of folks in camo shooting at this and
maybe hitting that. Actual experience with sharpshooters and
bow hunters culling deer in suburbs seems to show good
environmental results, responsible participants and safe
operation.
Most hunters obey hunting laws. A few ignore all
regulation routinely. And others may be opportunists. But
I’ve always felt safer in a circle of armed hunters than
just about anywhere else in public. Of course, I’m
antlerless.
Still, I must admit that every year some sorry soul ends
up in our local court for having shot the Game Warden’s
dummy deer out of season. Inevitably, he will confess:
“Couldn’t figure it out, judge. The thing didn’t fall after
I put the first round into him. Then I put three more in,
and he still didn’t drop. Didn’t even quiver; never had that
happen before. One helluva buck, I thought at the time. Now
I know. Just glad it wasn’t my eyes that were off, or my gun
sights.”
The first Thanksgiving was based on deer, not turkey or
Pad Thai takeout.
The diners celebrated having made it through a dreadful
year. The Wampanoag, who contributed five deer, had lost a
majority of their number to the Europeans’ plague. The
Pilgrims were down to just over half of their original 102.
Unspecified “wildfowl” were eaten. No account mentions a
turkey, a real turkey—the kind that lives in the woods and
chews up more like a baseball than a butterball. The first
Thanksgiving may have gone cold turkey.
One of the ironies of this odd meal, which has captured
our consciousness, is that the folks who were perfectly
adapted to life in their native woods were almost wiped out,
and those who had not a clue about what they were doing
survived and prospered. The Pilgrims attributed this to
God’s will, but it’s arguable that guns and germs had quite
a bit to do with it.
Over the years, many Americans lost their taste for both
game and hunting. In their places, we now have latte and
social networking.
Today, venison is five-star restaurant fare, as well as
what poor country folks get by on. It deserves an audience
between the two.
This Thanksgiving I am grateful for many things. Both my
wife and my kid continue to talk to me, more or less
regularly. I’m a year older, but not too nicked up.
On Thanksgiving Thursday, I will focus once again on the
trimmings and not on the turkey, which, thankfully, is still
a bird, of sorts. And I will hope for fewer deer and better
times for more people.
Curtis Seltzer is a land consultant who works with buyers
and helps sellers develop marketing plans. He is author of
How To Be a DIRT-SMART Buyer of Country Property, available
at
www.curtis-seltzer.com
where his columns are posted. He also writes weekly for
www.LandThink.com
and does commentary for Virginia public radio.
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Homeowners Ask for More Broadband Internet Access
Outcome of the stimulus investment will be broadband
access for rural homeowners.
The federal government has allocated $7.2 billion in
stimulus funds for the deployment of broadband to unserved
and underserved areas. This wise allocation of federal
stimulus funds will enable many rural homeowners to have
access to high speed broadband for the first time. Access to
high speed broadband is increasingly critical to almost
every facet of life. The penalty for being on the wrong side
of the digital divide increases every day. We must eliminate
this divide as soon as possible, both to benefit unserved
homeowners and other consumers, and the nation’s
competitiveness.
The Federal Communications Commission, Department of
Agriculture’s Rural Utilities Service and the
Department of Commerce’s National Telecommunications and
Information Administration were all involved in the effort.
Applications for the first round of funding were due several
months ago. Many state and local governments, nonprofits and
small businesses who applied for grants or contracts
(including the American Homeowners Foundation) found the
application process exceedingly cumbersome. In fairness to
these federal agencies, it was inevitable that glitches
would develop with any such massive undertaking under such
tight deadlines. To their credit, the agencies have
acknowledged the flaws in the process and have invited
suggestions on how to improve their broadband stimulus
funding allocation process in the future. On November 30 the
American Homeowners Foundation submitted our ideas to their
joint request for efficiency improvement recommendations.
Based on AHFs experience in the effort, background
research in the process of developing its application, and
additional background on the overall challenges regarding
broadband deployment gained over recent years, we made
several recommendations for the consideration of FCC, RUS,
and NTIA. Our recommendations relate both to the program’s
direction and application process:
1. When the program was conceived there was
little hard data available about the total cost of
providing universal broadband access. Recent cost
estimates are as much as $350 billion. It is clear
that $7.2 billion won’t come near to providing
universal broadband access, much less helping to
address the challenges of the underserved. Broadband
is available and affordable to many who are
underserved, but by definition completely
unavailable to the unserved. House Small Business
Committee Chair Nydia M. Velázquez (D-N.Y.) and 21
committee members wrote: "It is the Committee's
recommendation that funds should be targeted to
areas which are first "unserved" and only then to
"underserved" areas, if funding remains." We agree
with that recommendation and suggest that the
program focus exclusively on the unserved going
forward. To further refine the targeting of limited
ARRA funds it might also make sense to exclude areas
where broadband services are in process and will be
made available in the future.
2. It would be ideal if it were possible to
provide the fastest available broadband service to
all rural residents. Such an approach can undermine
sensible resource allocation, however. In terms of
cost per customer, RUS/NTIA will find that in many
cases it will be far less expensive to provide
relatively fast broadband service to the unserved
many than to provide the fastest service to the
unserved few. Since there’s not enough money to
connect everybody, the latter will be the better
course in many instances because many consumers
would otherwise have to wait many years for any
broadband service at all. These will be subjective
decisions, and we should all support the flexibility
that RUS and NTIA need to make sensible ARRA grant
and contract awards with these trade-offs in mind.
3. The current online application process appears
more complicated than necessary and should be
simplified to the extent possible. Other rules, such
as matching contribution and a first lien
requirement may preclude some worthy proposals.
Definitions of some terms, such as “remote” for
last-mile rural remote projects and other
applications need to be addressed. RUS and NTIA
should make every effort to resolve these issues by
the opening of the next round of applications.
4. AHF spoke to government staff in five
Shenandoah Valley Virginia towns as well as
nonprofit staff at several local Shenandoah Valley
nonprofits in the process of researching the
possibility of preparing its application. Only one
person vaguely remembered reading about the ARRA
broadband funding and none could recall having
received any information directly. While this is a
very small sample statistically, it does suggest
that it may be worthwhile to review first round
contact efforts to see if there are ways to improve
communications with stakeholders in the next round
(state, tribal, and local governments; nonprofits;
industry; anchor institutions, such as libraries,
universities, community colleges, and hospitals;
public safety organizations; and other entities in
rural, suburban, and urban areas).
5. The application was challenging for small
entities, many of whom encountered technical
challenges relating to the application process. RUS
and NTIA recognized the challenges faced by small
business applicants in their House Small Business
Committee testimony. It is worth noting that other
small entities faced the same challenges, including
nonprofits and small local governments, and other
small entities.
6. The latter observation has significant
implications for the administration and management
of the entire program. If many applicants find
themselves technically challenged by the application
process, many of them will also likely find
themselves technically challenged in carrying out
their contractual responsibilities. This also holds
true for public/private partnership and other
multiparty applicants. We have heard anecdotal
stories about difficulties finding sufficient
numbers of qualified screeners to review the
unexpectedly large number of round one applications.
In the next round of funding, care must be taken to
assure that there are sufficient numbers of
reviewers, that they are highly qualified, and that
they have adequate time to review each application.
FCC/RUS/NTIA might also want to consider efforts to
encourage more participation by technically
sophisticated applicants. Large telecom companies
reportedly sat out the first round because of
perceived restrictions. Those companies have
considerable technical expertise. From the
standpoint of program performance, it may be
worthwhile to review their previous concerns to see
if reasonable accommodations could be made so that
they would be willing to partner with stakeholders
or apply on their own in the next round.
7. Seek ways to enhance broadband adoption, both
through this ARRA effort and outside of it. There as
yet no silver bullets and progress will likely
continue to be incremental. Increased adoption rates
not only benefit the adopters but also improve
program ROI, so FCC, NTIA, and RUS should continue
to seek cost effective ways to enhance broadband
adoption through this and other efforts. While it is
outside the scope of this effort, policymakers
should seek ways to rebalance programs such as the
universal service fund so that it could support
broadband services for those who cannot afford it,
as well as enacting legislation such as the
Broadband Affordability Act.
8. Be prepared to provide sufficient resources to allow
careful oversight, management assistance, and vigorous
policing of abuses. We have previously explained the need
for oversight and assistance when appropriate to applicants
who may get in over their head. Policymakers will hopefully
be sympathetic in such cases, but they are unlikely to be
sympathetic in cases of outright fraud and corruption that
are not uncommon with any new large government program. RUS
and NTIA should pursue all cases of outright fraud and
corruption promptly and aggressively in order to maintain
the integrity of the program.
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Government Will Rent Homes Back to Foreclosed Owners
Some may later be able to buy back their homes.
Fannie Mae is joining Freddie Mac in allowing foreclosed
homeowners and renters to remain in their homes and rent
them from the government. Unlike Freddie’s lease program,
which currently is month-to-month, Fannies leases are for up
to 12 months. The program is aimed at homeowners whose
economic circumstances have deteriorated beyond the point
that they can realistically be considered for mortgage loan
modification programs. At the same time they must still have
enough resources to be able to pay market rents for the
duration of the lease.
The goal of the "Deed for Lease" program is to reduce
disruptions in the lives of troubled homeowners while
helping to stabilize home values by keeping more foreclosed
properties off of the market. In some cases the distressed
former homeowners may be able to get back on their feet
economically during the lease period and could buy their old
homes back. Although 2/3 of those who do qualify for the
program have opted to participate so far, it’s unclear how
many might qualify for the program. Fannie Mae acquired
57,000 properties through foreclosure in the first six
months of 2009, so it could be quite a few.
One downside of the program is that it will have a
negative impact on Fannie Mae’s cash flow until those homes
are eventually sold. On the upside, the homes in the Deed
for Lease program could be worth more when they eventually
are sold, and taxpayers will also save a 6% real estate
commission on any that are sold to the current renters. In
November, Fannie requested $15 billion from the government
to cover its $18.9 billion third quarter loss. While the
program will unquestionably lessen the misery for many
homeowners, it is impossible to know whether
The American Homeowners Foundation believes that the Deed
for Lease program is an outstanding idea. It allows the
government to generate fair market rent revenue from
foreclosed properties it would lose money on if sold in
today’s market. Homes with tenants are less likely to be
vandalized than unoccupied homes. The program will help many
homeowners who are innocent victims of mortgage fraud or job
losses/cutbacks as a result of a mortgage lender-induced
recession. Home values continue to drop, and this program,
like the home buyers tax credit extension just passed by
Congress, will help prevent home values from tanking even
more and possibly setting off another economic meltdown.
Mortgage lenders should consider a similar program
themselves. Growing numbers of underwater homeowners who are
innocent victims of job losses/cutbacks are simply moving
out and mailing the house keys back to the mortgage lenders
because they can’t afford the mortgage payments. Many of
those homeowners still earn enough to afford to pay market
rate rents, and the lenders would also be better off earning
rent than generating no revenue and risking vandalism to
unoccupied properties. Those of us who own stock in
financial services firms through our IRAs, 401Ks, pension
plans or investment portfolios are being poorly served by
financial services firms that do not take steps similar to
Fannie’s to protect their shareholders’ assets.
Irresponsible mortgage lender practices were one of the
primary causes of the current recession that created much
misery for many American homeowners. It’s time for them to
start acting responsibly and help their stockholders, the
economy and American homeowners.
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To look up the phone number, email, and/or
postal address of your U.S. Representative or your
two U.S. Senators, (or your state representative or
state senator)
click here. You can also look up which
legislators represent your zip
code if you don’t recall their names.
A personal meeting is a particularly effective way
to get their attention and reinforce your message.
Many legislators are also happy to meet personally
with their constituents when they are back home on
weekends or when Congress is not in session. Because
of the current debate over healthcare legislation,
it is unclear when the
House and Senate will go into recess in December.
Please consider also requesting a follow up
face-to-face meeting in their home state or home
district offices near you when you contact their
Washington DC offices on policy issues.
Is there a policy issue that is particularly
important to you which significantly impacts
homeowners or home ownership? Any member may propose
a position on a policy issue, so please check the
American Homeowners Grassroots Alliance's 2009
Issue Guide to see whether it’s already on our
list. If it isn't on the list, we invite you to send
us an email and tell us why you think the American
Homeowners Grassroots Alliance should take a
position and work on it.
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