I have been in the real estate business for 28 years, am formally well-educated, (unfortunately not Yale) listen to you regularly and review your studies. I read daily on residential real estate related matters, speak to well-qualified real estate agents in four different jurisdictions from Virginia, Maryland, Colorado, California and the District of Columbia. I also entertain phone calls from volumes of folks each day including first-time homebuyers, military, middle class as well as the upper ranges who are trying to buy residential real estate in Northern Virginia or perhaps simply qualify for a home with fair mortgage financing.
The residential real estate market can’t possibly wholly recover until such time as a structural lending disconnect is fairly and equitably addressed. So, my query is: do public sector mortgage financing institutions simply not understand or are they purposely trying to harm and discredit one of the largest segments of the home buying public, specifically the retired, self-employed or the entrepreneurial class? Robert, there is absolutely no correlation between one’s ability to repay a mortgage debt and whether nor not they have supporting yearly income in any given year or years. What I am simply suggesting is the federal mortgage lending “delisted” institutions are basically no longer considering assets as a fair and equitable mortgage qualification metric, which not only is an affront to a good segment of our population, it is also making it impossible for housing to sustain a gentle upward rehabilitation. This nation can’t survive financial castration of the self-employed or retired by structurally disabling this segment’s right to secure mortgage funding at fair market Freddie Mac , Fannie Mae or FHA rates, terms and conditions regardless of assets, low debt ratio, Loan to Value and credit worthiness.
I received a call a few weeks ago from a self-made investment banker who owns a good portion of his home, has a 760 credit score and because he is not showing income to qualify this particular year can’t refinance regardless of his wealth and low debt because the new lending guidelines refuse to address accrued assets. Meanwhile, the next call-in comes from a government employee with a marginal education, $15,000 saved and only a 650 credit score, debt and qualifies with ease based on their yearly government salary. This discrimination has got to stop or our nation certainly is going to. Show me one government or nation that has prospered by destroying its productivity class? Show me one, please? Not only is it discriminatory, it makes no sense as lending must be, in most cases, based on one’s financial ability to repay, no more, no less as traditionally has been the norm prior to the mortgage lending debacle.
The solution: Go back to the system as it always was prior to the absurd slack lending guideline modifications that caused the problem. Simply put: assets, debt ratio, credit, LTV and income. If assets are satisfactory, LTV, debt ratio acceptable and credit report outstanding, there is absolutely no reason interim disruptions in income or a disqualifying adjusted gross income by today’s “new” standards should automatically mandate a home purchase disqualification of an otherwise highly well-qualified applicant.
Good credit, LTV and ability to repay should be the basic qualification denominator as it always has been. What made America is largely attributed to housing, and now continues to destroy it and if proper actions are implemented quickly this matter can be resolved, but not until the public sector discontinues flogging the self-employed and retired. Most self-employed have no pay guaranteed paycheck, no retirement, work six and seven days a week and have the courage of their convictions to create and produce something of value adding to the nation’s GDP by themselves, for themselves and ultimately for the betterment of our GDP and housing market. Cripple this segment and cripple your nation.... it is really this simple. If the current administration does not wake-up to this specific matter real soon, they certainly are not going to be re-elected. People have had it, The Left, The Middle and The Right. The problem is not merely housing, it’s the current public sector lending qualification modifications. It is so obvious, therefore we must conclude in a Draconian sort of way, the public sector is engineering this for a purpose not in good concert with our economic foundations or the current and future welfare of this country.
The problem of not lending at fair market rates to well-qualified self-employed or retired is so obvious yet is never spoken about in the media? As professionals this is confusing because we know the residential market can’t equitably recover until the real culprits, unfair and biased mortgage lending practices are addressed. As in venom , the cure to bites often is secured in the chemistry of the poison itself.
We need not discuss the problem which we could visit going back to the CRA, various inherently flawed “community programs” which manipulated lending guidelines ultimately causing the housing collapse. In sum, the reason being flawed underwriting practices annexed to many type mortgage programs, most of which lie between congressional relationships with Fannie Mae, Freddie Mac and FHA, need not be reiterated as we all know the same. Regardless of party affiliation, these practices in relatively few years led to the destruction of residential housing in the United States. Be this as it may, the current administration is not doing what needs to be done to correct the systemic housing cancer. In fact they are taking the wrong measures. Most of us are saying the same things regarding lending discrimination, yet it’s never brought up by you or the media... Why not?
Therefore, we would greatly appreciate your academic, albeit street savvy response to our question, New World Order “Robin Hood politics” aside, wherein we believe lies our demon. Put simply, three particular groups which make up very large segments of home purchasing and refinancing in this nation, the self-employed and retired are being discriminated against. The housing numbers came out today and no surprise, not good. How about fixing the financing problem addressed in this correspondence and these home sale numbers will certainly improve. If I missing something please explain, otherwise it is the conclusion of millions of Americans that the public sector is purposely damaging our nation’s welfare via discriminatory real estate lending practices for reasons not being openly divulged in the mainstream media. This has been going on for nearly five years... enough is enough. Please give us your opinion of our analysis.
Good highly qualified people working in self-employed careers and others who may be comfortably retired without government retirement plans need homes, can afford these homes, have excellent credit, low debt, good assets and approved LTV yet can’t refinance or can’t buy! Since when is Good Ole American hard working entrepreneurship and having earned a comfortable retirement a national dishonor or a ticket for economic disparity in the western world? Ok, let’s all go work for the government and see how that works out. This is nuts what is going on... just nuts. “Socialism is a great idea until they run out of everyone else’s money.”
I hope you write back personally. I have written the Federal Reserve, my Democratic congressman, our Democratic district representative and have never once had the courtesy of a response. Maybe I should use crayons next time? What is wrong with these people?
Thank God for Jimmy Carter’s Habitat for Humanity, at least we will have a place to live one day.
Thanks,
Harley Meighan
