Friday, July 8, 2011

The gov't should let me fix the real estate industry

The gov't should let me fix the real estate industry. Here's how:'

1. First, I would make whatever banks have to service whatever loans they grant. No passing them off to Greece or Iceland.

2. Second, I would start adding one per cent a year or every second year to the down payment amount people would have to pony up, till everyone had to have at least 20% down. However, I would make savings for a down payment a before tax saving, as long as it was in a certified down payment account. The interest on the account would also be tax free.

3. HELOCs would only be allowed if the bank was able to certify that the funds were actually used for home improvements. No rolling in car loans, trips, boats, credit card payments etc. or taking out cash for something unrelated to the house.

4. Only certified appraisers would be allowed to appraise. No broker price opinions. No bank rules for appraisers.

5. No gov't bailouts for banks, no gov't guaranteed loans like FHA except for low income housing. Low income housing only for those with low incomes, who would be able to 'rent-to-own' by adding a down payment amount to their rent each month.

6. Get banks out of the real estate business, because they are artificially depressing prices. As long as they can do foreclosure sales & short sales & the gov't makes up the difference between what they are owed & what the house sells for, there is no incentive for the banks to allow prices to settle into a normal supply & demand mode.

Mary's Funny Real Estate Stories

A New Orleans lawyer sought an FHA loan for a client. He was told the loan would be granted if he could prove satisfactory title to a parcel of property being offered as collateral. The title to the property dated back to 1803, which took the lawyer three months to track down. After sending the information to the FHA, he received the following reply.(Actual reply from FHA): "Upon review of your letter adjoining your client's loan application, we note that the request is supported by an Abstract of Title. While we compliment the able manner in which you have prepared and presented the application, we must point out that you have only cleared title to the proposed collateral property back to 1803. Before final approval can be accorded, it will be necessary to clear the title back to its origin." Annoyed, the lawyer responded as follows: (Actual response):"Your letter regarding title in Case No.189156 has been received. I note that you wish to have title extended further than the 206 years covered by the present application. I was unaware that any educated person in this country, particularly those working in the property area, would not know that Louisiana was purchased by the United States from France, in 1803 the year of origin identified in our application. For the edification of uninformed FHA bureaucrats, the title to the land prior to U.S. ownership was obtained from France, which had acquired it by Right of Conquest from Spain. The land came into the possession of Spain by Right of Discovery made in the year 1492 by a sea captain named Christopher Columbus, who had been granted the privilege of seeking a new route to India by the Spanish monarch, Queen Isabella. The good Queen Isabella, being a pious woman and almost as careful about titles as the FHA, took the precaution of securing the blessing of the Pope before she sold her jewels to finance Columbus's expedition...Now the Pope, as I'm sure you may know, is the emissary of Jesus Christ, the Son of God, and God, it is commonly accepted, created this world. Therefore, I believe it is safe to presume that God also made that part of the world called Louisiana. God, therefore, would be the owner of origin and His origins date back to before the beginning of time, the world as we know it, and the FHA. I hope you find God's original claim to be satisfactory. Now, may we have our loan?"The loan was immediately approved.