Saving America’s Family Equity, of SAFE loan program

[Yanqui]

Did not know what to do with this, but would like imput on these two proposals. Are they in the works? Have they been past into law? What is going to be needed to help people? Are these programs already enacted?

Saving America’s Family Equity, of SAFE loan program which is modeled after the New Deal’s successful Home Owners’ Loan Corporation but uses existing government agencies and government-sponsored housing institutions to purchase pools of loans at current value and refinance those loans that are in default or have negative equity into fully amortizing, fixed-rate loans based on the current value of the property.

the Great American Dream Neighborhood Stabilization Fund, or GARDNS Fund, would provide money to local housing authorities and non-profit organizations to buy foreclosed properties from banks and return them to productive use as affordable housing. Taken together, these two proposals can stabilize neighborhoods and restart frozen housing markets by significantly reducing excess inventory and moderating downward pressure on home prices.

[Yanqui]

I did my research, and the Saving America’s Family Equity, of SAFE loan program is the Sheila Bear/FDIC plan I believe; if my comprehension skills still work.

No wonder it hasn't taken affect, it's so simple, and straight forward that it gives the bureucrats in Washington a headache.
http://www.fdic.gov/consumers/loans/loanmod/NPV.xls

It is exactly what is needed at this time, and then the country can focus on creating substainable job growth at wages that are not lagging thirty years behind the rate of the living increases.

[cactus77727]

Great info, thanks for posting. So this is from back in January 2008?

The numbers are staggering. It's incredible. The one article states: "According to one estimate, home prices may decline by 24 percent before reaching bottom." (Jan 2008) In Phoenix, we've blown thru that estimate. According to Schiller index Phoenix is down 32.7% Oct 2007 to Oct 2008. That's one third gone! And that is just the one year period.

Many observers believe that there is a serious risk of a sustained recession, or worse.

That seems so understated even for last January.

There is a growing consensus among economists and financial experts that a range of housing-specific initiatives are required.

So we know somebody was sounding the alert back then. And still, they've done nothing yet.

The mortgage servicing industry appears ill-equipped to handle millions of individualized decisions regarding loan modifications.

That explains a lot. Supports what Prof Shays has been saying over and over.

If we do not take the steps today to facilitate the private market restructuring these loans and restoring liquidity and confidence, we risk finding ourselves in six or nine months with a crisis so severe that the best option available is direct government intervention. While the question is not without difficulty, in my judgment the risks of the proposal are significantly outweighed by the risks of failing to act.

They were told. They knew.


It's hard to believe homes will go lower from here, but most of the indicators seen to say they must go lower. Given the other economic data, (jobs, commercial real estate starting to tank, retail, etc...) I can't see how they are going to stop the bleeding, let alone begin a recovery. Honestly, what are they going to do? Looking at the numbers reminds me of the feeling you get when standing at the edge of the Grand Canyon. All you can say is, WOW. That's a really big hole.

One thing is for sure, these next few years are going to be really interesting.

[cactus77727]

If anyone from the government reads this...

You need to add to the plans, some kind of renter/caretaker program, where for very little money, families can stay in a foreclosed home, in exchange for maintaining it, or something like that.

[Yanqui]

Cactus77727, my primary home is in Waddell near Surprise. The 303 and Olive and the model home of my home style sold for one hundred thousand dollars then what I paid for mine. And the model had over a hundred thousand dollars worth of upgrades to entice buyers. Mine was bare bones. No landscaping (front or back) no screens (told me that how's they sell here in Arizona) no curtains, or window shades, and no fireplace. The model has two fireplaces with one in the master bedroom with double doors leading to the backyard. I think zillow shows a 38% drop in one year.