How To Get Home

There is no shortage of discussion about the future of the housing and mortgage markets these days. Now that home owners, lenders, and Wall Street are focused on the risk in the system, there is a good chance that positive changes are coming. There will be a ton of lawsuits coming down the pipe and probably lots of new regulation/legislation to go with it. There will be an endless supply of finger-pointing and they-did-this-to-me.

The sequence of the mortgage meltdown will go something like this:

1. Identify there is a problem (done)

2. Determine the scope of the problem (if possible, under way now - will take time to play out)

3. Blame everyone -

4. Attempt to find short term fix by spending tax payer’s money for some to-be-determined sized bail-out.

5. Legislate new “suitability” standards (do you have a job that you can document?)

6. Go back to making loans with down payments and realistic debt-to-income ratios.

Let’s hope that those out there with the “exotic” ARM loans will take some time and look to see if they can reduce the risk associated with their mortgage. If the industry can stop making bad subprime loans and refinance as many of the existing ones as possible, maybe the impact of the subprime meltdown can be reduced.

The fact that 69% of America owns their home (for now) shows that public policies and financial products have helped drive this record buying spree. What will be interesting to see is how efficient the system is to facilitate the coming market changes. With the internet, Zillow, more educated buyers, the transparency in the system now will bring change more quickly.

For everyone in the housing and housing related business, positive changes are much needed and welcome.