Written by: R. Peirce Cook, Jr.
Cell: 301-919-0030
Challenge
FNMA/FMHLC/FHA/VA all provide Government loan programs supported by all US taxpayers, yet qualification is being made difficult for even the most credit worthy consumers because of obscure guidelines.
Solution
Attention needs to be focused on reducing current pricing adjustments, creating flexibility for borrowers who barely miss certain criteria, and allowing more flexibility for those who are the most credit worthy.
Challenge
It appears that no company, agency, or person is analyzing this complex problem and applying new innovative ideas to find solutions. Everyone seems to be looking at the current loan options and trying to cram the same struggling American borrowers into the same old loan programs.
Solution
Challenge
FNMA/FMHLC/FHA/VA guidelines are so specific that if a consumer is on the cusp and does not fit into one of the predetermined black and white tranches they are denied a loan and provided with no follow-up or other alternative except waiting and going through the process from start to finish all over again.
Solution
Allow consumers that are on the cusp of qualification for a loan program to accept a lien on the property so they can complete the refinance – develop predetermined repayment terms and offer this lien/financing at a nominal rate to be paid to the government and deductible on ones tax return. When the property ownership is transferred the lien must be repaid or transferred to the new owner.
Challenge
Consumers are not willing to commit to banks/lenders and want to shop around for the best deal and banks and lenders are spending time, energy, and resources to service consumers who are shopping. The media armed with miss information is exacerbating the problem.
Solution
If banks are willing to commit and give an approved consumer the desired rate, then the consumer must commit to the transaction by pledging assets with the bank (i.e. purchasing a 3 or 5 year CD with an early withdrawal penalty) which would allow them to qualify for TARP subsidized rates and loan programs.
Challenge
Consumers are confused by the process and there are too many barriers for people to obtain accurate information and most lenders are not well prepared to meet the public's needs.
Solution
Mandate that banks and lenders put policies and procedures in place that help consumers get the correct information, and guarantee all fees and costs associated with a transaction completed under the newly established program.
Challenge
The average consumer has no avenue to get into a traceable and accountable system to receive follow-up once their loan application has been denied by a lender. If you are upside down on your mortgage or falling behind on your payments you are simply out of options.
Solution
Create and maintain a National Registry for Mortgage Help, to be overseen by the Government, where people can enter their information and ask to be contacted regarding their specific mortgage situation. Banks and lenders will participate in the National Registry and be held accountable for consumers with which they do not provide follow-up. This should be a mandate to banks who are receiving TARP funding.
Challenge
There is no established program or policy requiring people who refinance using Government supported loan programs to make investments in their complete an energy weatherization, to upgrade their home's energy efficiency, tied to the new loan financing.
Solution
Include an energy inspection requirement as part of the appraisal process, and require completion of all energy upgrades financed by a loan before any deed restriction is released.
