I think for the most part, the wheels have been set in motion. Trillions have been put in play to stabilize the financial system and about $825B more will be thrown in the pile in a few weeks. Lenders have over corrected in their flight to safety and are damaging the collateral they are trying to protect. I think the most important thing Obama can do is take a strong leadership role to promote the soundness and stability of the US to restore a sense of trust. There has been a void in this regard. Much of the suggestions may actually make the problem with credit worse. The free markets need to have time to work and until enough time has passed, there will be a lot more pain. Time is the missing ingredient and the realistic expectation of more pain before recovery. Stabilize credit first, and then housing will follow. This is a multi-year process.

My vote is to let the market cleanse itself of the bad transactions and loans that accumulated from 2002 to 2007. Don't prop prices up or slow the foreclosure process: just let it run its course.

WE ARE TAXED ON HOME SALE PROFITS--WHY CANT WE DEDUCT A LOSS?

The President should allow home owners to deduct the loss on a sale of their primary residence---we are taxed on home sale profits--we should be allowed to deduct our loss.

Propose and pass the 2009 Homestead Act:

It is well past time for us to consider a new 21st century Homestead Act. I wrote about this previously as well, but the sight of a $1 house is evidence that something dramatic needs to be done.

* Rough outline of a new Homestead Act:
* Banks surrender the property to the municipality. They can claim a loss for future tax writeoff, but importantly, they get the property off their balance sheets.
* Municipality waives all back taxes, transfer fees, etc.
* Utilities write off all water/electric bills, etc.
* Property is made available as is to any legal resident willing to live there.
* You must stay in the residence for at least five years.
* During your stay, you must maintain the house in reasonable condition and not engage in any illegal activities in the house.
* It must be your primary residence for those five years.
* You must pay all property taxes and fees associated with homeownership, such as for trash removal, water and sewage, etc.

At the end of the five year period, the homesteader receives full title to the property free and clear.

In a stroke, you have eliminated the foreclosure problem, provided a path out of urban blight issues, and provided low-cost housing to families who actually want to work at achieving their American dream.

1. Understand the government can do nothing constructive to stop foreclosures. Anything they might do will further harm or freeze the markets.
2. Make the tax loan of $7500 a credit instead of a loan.
3. Start a tax free "home savings account" much like the medical savings account or a Roth IRA.
Allow people to save tax free for a home down payment and closing costs.
4. Remove the 4 loan limit for successful investors. There are many investors that are honest, successful, and want to buy more homes, but can't do to the current FNMA limit of 4 loans. That alone could reduce inventory 10-20%.

Let’s start with the premise that lenders are taking 20-30% hits on short sales. Then, let’s have the US Treasury loan 30% of the balance, of the aggregate debt, to homeowners whom request it, in order to pay down the first mortgage (or second mortgage). If I have $200,000, in aggregate liens against the property, the US Treasury will lend me $60,000, to pay down those aggregate liens, to $140,000. This reduces the lenders exposure.

What type of loan will the Treasury make to homeowners?

The term can be for the lesser of:

1- the remaining term of the first mortgage

2- 65 less the age of the primary borrower.

The interest rate can be the corresponding term treasury rate, plus .5% (for administrative costs). Maybe we can use some of that “yield spread” to coerce a few mortgage brokers to “originate” this government debt (okay, that was completely self-serving). For a 42 year old, with a 27 year term on his first mortgage, the term of this new government loan (in second position) would be 23 years (65-42=23). If a 23 year treasury bond yields 4.1%, than the note rate for the new loan will be 4.6%.

The borrowers never have to make a payment on this debt; it accrues like a negative amortization loan. In the aforementioned example, the balance would grow to about $168,000, after 23 years. With a first mortgage paid down to $140,000, we’re banking on the future value of the property growing to $308,000, by the year 2031.

When the house is sold or refinanced, the government loan is paid off. We’ve essentially solved the liquidity problem, bottomed the real estate decline, and “helped” real people by using government funds.

What if the borrower skates on the loan or short sells the property? Moreover, what if the real estate market NEVER comes back, and the property is never worth $308,000, in the next 23 years?

1- Make the remaining loan balance transferable to new properties.

2- If that lien is NEVER satisfied, deduct the balance from the year 2031 net present value of the borrower’s retirement entitlements’ account (social security and Medicare).

The program is completely optional.

The free market system can correct the ills that currently ail us, but the process would inflict extreme pain without government intervention. One might be able to survive several tooth extractions without medication, but would we boast that as a wise decision?

The question isn’t if, it’s how. Should greater emphasis be placed on increasing sales (stimulate new purchases) or decreasing the drain (reducing foreclosures)?

Increased sales activity will result from inexpensive money (low interest) with reasonable qualification guidelines, stable incomes, and confidence that the asset will hold or increase in value. The government can affect interest rates and influence qualification guidelines (requirements bestowed upon lenders in exchange for bailout monies.) Stable incomes come a stable employment market and economy. Real estate values will continue to decline for as long as foreclosures continue to increase on the market, and the public is afraid to buy. Declining values become a self-fulfilling prophecy.

Government bailouts of banks need to have expectations and guidelines that serve the greater public, not just the bank’s interest. The justification of bailing out banks is the preservation of the economy, not saving the individual institutions. Loan modifications have proved largely unsuccessful because the new modified programs did not offer true solutions. Strapped homeowners are given a choice of the only loan mod presented or foreclosure, and opt for the long shot loan mod that really was ineffective because it was only a bandaid that delayed the inevitable. Allowing the banks to have bailout monies without accountability or oversight wastes money and time.

Bailout oversights could include:

1) Meaningful load mods. A) Write down loan balances to reflect market values B) Modify interest rates to low fixed rates or 10 year ARMS, C) Defer a portion of a principal with repayment of principal or interest for 10 years in exchange for a shared equity program with the lender or government. Homeowner gets to stay, but does not get a free ride. The government bailout becomes a loan, rather than a give-a-way.

2) New Purchase Money. Provide greater FHA limits to fuel more purchase money in the system. Make financing guidelines reasonable.

3) First Time Homebuyers. Fuel this market with true tax credits.


Fear paralyzes buyers. For as long as buyers suspect that the asset they purchase today will lose money, they will be hesitant to buy. The housing boom was stirred by an abundance of cheap money along with the belief that the asset would appreciate. Today, money is still cheap, but not easy. Buyer confidence was headed toward the Marana Trench, but seems to have stopped its descent long enough to gasp for breath with a recent glimmer of hope. Without affirmation to support that glimmer of hope, the tide can and will resume a downward spiral.

I believe that bailing out mortgage loans that were agreed upon by all parties would not be the wisest way to save our economy and housing opportunities. However, easing the burden through a 40-50 year mortgage program can lower monthly payments and help prevent foreclosure. This would keep all parties liable for their debts and not lose any interests.This will also allow banks to give more value to their "paper". New buyers would also enter the market that could afford the lower mortgage payments.

The payment difference from a 30 year loan to a 40 year FIXED loan can help those buyers on the fringe of making their payment. A hundred dollars a month can mean the difference between paying your mortgage, or feeding your kids. If they had 40 year FIXED, or even 50 FIXED year, loan products available to everyday consumers with low down payments and those that are on the brink of foreclosure, then we would see an easily quantifiable turnaround to the housing market.

Of course Job security is integral to home ownership, but this act would prevent 1,000's of foreclosures and Millions of dollars in loans. The link below (although dated by a few years) shows the difference in payment as a loan term grows, you need to change the rates to today's to get a better idea of the difference. The example also does not reference a fixed loan, which is what is needed now to help bail out homeowners in foreclosure.

The question is, do you want it quick or slow and painful. The bailouts are a nice relief, but it's a slow and painful effect. It's working short term but what's going on long term is the question.

Personally, I'd prefer to see the free market take over. Banks that make bad investments SHOULD be out of business. Foreclosures should happen. Some people have TRUE hardships and that is the tough thing, but a lot of people need to take responsibility for their actions.

Actually, accountability is the key word here.

HUD contracts with Realtors, Attorneys and people in high places should be held accountable and removed if necessary. Real Estate is something local that has a ripple effect. Get enough people who really want to work and help this situation involved and I think you'll see a turn around.

Ask any successful agent in the last year and I bet you they remember BY NAME the REO agent that was actually good or the REO attorney that didn't cause confusion or delay with their antics. That's a pretty telling story.

A system of accountability across the board needs be implemented. Since lists are what people read... here's my proposal.

1. Simplify the truth in lending - Good Faith Estimate - It's still too difficult for the average person to decipher.
2. Accountable agencies and contracts - Under performing Assets and agencies need to be reviewed.
3. Transparency in the Programs - Special Government Grants, Credits and other options shouldn't require a manual to explain to the public. The most recent $7,500 Tax Credit is a great example. Most americans still don't know about or why it's valuable to them.
4. Take a Stand - Does HUD want to be home owners? If so, allow the section 8 housing and other methods to produce SOME income on these assets. If they don't want to home owners (in a sense) then work on making these properties more accessible - in all facets.
5. Responsibility of the advisers - each state is different but most people agree that they rely on their real estate agent for advice. Some states like Georgia place a lot of WEIGHT and responsibility with the actually licensee. However, this is contrasted sharply by the total lack of standards and the ease of entry into this field. If the responsibility as described by the state is the equivalent of a doctor or attorney then the educational requirements and certifications should match appropriately.

It's a hard one, but...develop/support programs to enable more (though not all) struggling home owners to stay in their homes, instead of adding to the pile of foreclosures hitting the market. Encourage responsible lending by the banks and new home ownership with (non-loan) incentives. Finally (and probably first) focus on raising consumer confidence to get buyers in off the sidelines.

he could let market forces determine pricing. Nothing to fix.

Problem:
Our economy will not fully recover until property values stabilize. As long as the foreclosure rate is increasing, there will continue to be downward pressure on home values and an increase in inventory. The solution _must_ involve getting bad loans completely off the books.

Currently, the so-called "short sale" process is onerous (3 - 6 months to get lender approval!) resulting in an unnecessarily high foreclosure rate which hurts _everyone_ (banks net far less from a foreclosure, Sellers can't buy another home for at least 5 years, and neighborhoods decline as vacant, unmaintained homes degrade and drive down property values).

Solution:
Streamline the process for loan modification/short sales by using bail-out money to hire scrupulous, federally-regulated processors with reasonable criteria and a 30-day timeframe for approval. Only banks able to process them within 30 days would receive any reimbursement of forgiven debt.

If a homeowner stays current with their new payments for two years under a loan modification, all related negative-credit remarks should be stricken. Any Seller who repays the lender the agreed-upon deficiency portion of their short sale should have the short sale removed from their credit report.

Guidelines:
1) Loan Modification (assumes the homeowner wants to stay in the home and they have some kind of income stream) - if there are bonafide hardship situations (job loss, divorce, extended illness, etc) such that the homeowner can no longer make their current payments, they get interest-only loans at 5% and structure the repayment plan such that the payments increase after 3 - 5 years (depending on their circumstances) and principal begins to be paid. (Note: no debt is forgiven! You rely on the homeowner staying put til the market value of the home increases to more than the indebtedness) This keeps the homeowners in their homes, keeps the banks making a reasonable return, and keeps excess inventory out of the market.

2) Short Sale (assumes there is no equity in the home and the Seller is insolvent and/or does not have an income stream or does not/cannot stay in the home) - participating banks would be reimbursed for writing off up to 20% of their loans and the homeowner would owe the balance of the deficiency in the form of a lienable promissory note that they pay off to the Lender at a low interest rate over time.

Critical Third Compenent That No One is Talking About:
Many borrowers in these situations do not understand or have difficulty handling credit. Anyone receiving a loan modification or short sale approval should have to first attend a HUD-sponsored credit counseling class and their credit should be "locked" such that no one is allowed to extend them credit for at least two years. The lender extending the loan modification/short sale debt forgiveness should be allowed, at their discretion, to consolidate all consumer debt the borrower has at the time into a 10% interest-limit credit card with no additional credit available on it. This helps prevent re-default (which is currently occuring in 60% of loan modifications within 6 months!). After two years (or earlier If the borrower is able to pay off all their consumer debt), the borrower would be given an additional credit limit equal to 1/2 of their gross monthly income for the next year. After the third year, if they remain current on all payments, all restrictions are lifted.

Last, but not least!
We need usury laws to be enforced on credit card issuers again. Credit card issuers should be limited to the interest rate allowed by the usury laws in the state where the BORROWER resides, not where the CREDITOR is incorporated. (The law was changed during the Reagan era and consumer debt increased dramatically as a result.)

Having never been in the business of selling houses may mean I don't know what I am talking about or am unbiased. Take your pick. Either way I have an opinion.

I agree with Deborah and Christopher, but mostly with Chris. This has been ignored to the point that jobs are of first priority. Not that we didn't see it coming with NAFTA and outsourcing jobs. People obviously don't care how much something costs or what it is worth, it's the monthly payment that rules.

I don't mean to say they don't care about their equity, but it is second to where the house payment fits in the monthly budget.

2. After the jobs, Obama needs to re-define our economic indicia. I guess that means finding a chief economist who makes sense, but as long as consumer confidence is measured only by how much people spend we will repeat this crap over and again.

The way it is, we are simply recycling recessions to the advantage of a few guys at the head of the food chain. These are the guys that benefit the most from our notion of "free market." So number three in my economy-fix journal is for Obama to set up a daily watch of the guys that want to be employed as CEOs and high up corporate officers. Let the market be free, but watch those guys. Make 'em do everything in writing, hire somebody to rat on 'em and each one should wear an ankle bracelet and have his passport revoked until he no longer wants to be in charge. Oh, and pay them em just enough so they can live the way most of the rest of us do.

President Obama already has the the support of Congress with legislation aimed at stimulating the economy and helping the housing market. Part of the economic stimulus bill is aimed at stimulating home buying and preventing foreclosures. The bill includes tax breaks for first-time home buyers and a return to the higher loan limits in place for Fannie Mae, Freddie Mac and FHA. The higher loan limits will certainly help in high-priced areas like Manhattan.

Low mortgage rates - 4% for 30 years with no prepayment penalty for all buyers and home owners is needed to give people a bargain interest rate. The market will respond with people running in to refinance and to buy.

In Manhattan there already is an optimistic attitude about President Obama's leadership. This past Sunday at some open houses here there were lines of boots outside the door and some buyers were waiting in the lobby to be brought up. Many of the properties had price drops and are still negotiable.

President Bill Clinton signed the Tax Relief Act together with the Balanced Budget Act of 199. In my opinion probably the most significant change in recent times affecting real estate. This law made some major improvements for home sellers, property owners and first time home buyers. It simplified taxes for 99% of Homes sold in the U.S. by excluding up to $250,000 if single or up to $500,000 if married, of the capital gain on the sale of a primary residence.

This tax reform enabled many to keep much of their wealth that they accumulated from the sale of their homes. The 1997 tax reform law also allows early withdrawals from Ira's without penalties of up to $10,000 for First Time Home buyers. President Clinton also established empowerment zones with tax breaks to developers for building there. Look at Harlem today it is revitalized. President Obama will be wise to seek advice from the former President as well as a great leader like Mayor Bloomberg.

We need affordable housing but we don't need housing projects. Developers should get tax breaks if they build mixed income housing and "green" buildings. They should get tax breaks for allocating a portion of affordable housing 80/20% in luxury developments. Different socio economic demographics mixed living together in the same development. Tax breaks should only be given for a reason. They should only be given to those who earn them by giving back to communities.

Obama so far is pragmatic and hopefully will bring bi-partisanship back to government. Free markets are great but they need to be fair markets. Markets go in cycles but they need oversight and some times they need a catalyst. to stimulate them. Real estate goes in cycles and so does politics. The pendulum has swung we ar entering the Barak Obama cycle.

Require banks holding foreclosed properties to make FHA repairs once the house is under contract with an FHA buyer. Many times a foreclosure is all a first time buyer can afford, and the banks are adamant about "as is-where is". Due to cash for keys, many foreclosures I see are in fairly good shape could be brought to FHA standards for less than $2000.

Need to purge the system of the remaining toxic loans and then set up a structure that allows banks to begin rationale lending to pump some liquidity into the market.

Americans certainly don't need any more mortgage loans given to those families who cannot afford them. This is the main reason why we are in this housing crisis.

More mortgage loans supposedly backed by the government for those who cannot afford them is in this falsely called “stimulus” package that just passed. Previously the government made mortgage lenders give mortgage approval to people who could not even qualify or afford monthly mortgage payments. The absolute best thing for our housing market and America overall would be for Pres. Obama to come down to earth. For him get real, stop spending the people’s money, and stop making jokes about this serious matter: What is so funny? Whenever a Senator spoke against the trillion dollar stimulus (soon to be 3 trillion dollars), Pres. Obama would condescendingly make jokes of the Senator(s). [These jokes didn't even make sense.] This is a very, very serious matter. Your children, your grand children and maybe even their children will be paying for this frivolous spending bill. We don't need Karl Marxist ways here in America; this won't help the housing market either. Our Founding Fathers believed in our government running on a shoe-string budget. Heavy taxation, isn't that why we broke away from the crown??

We may very well be pushed into a 1930s depression if this doesn’t stop!! Centralizing our government, making it larger and stronger, taking rights away from the people—that’s what most of this heavy spending bill is about. The people of America will pay—again and again and again. Politicians should work for the people, not the other way around! Obama and his staff knew most senators would never read the stimulus package/book—the largest in history! This ‘book’ is propaganda we don’t need in America. Most Senators admitted they did not read this stimulus book, nor did they skim it. This so called “stimulus” is a crime against the people of America. America doesn't need over 3 trillion dollars more in debt. (The plan is for 3 trillion dollars over the next few years.) Our Country is bankrupt now, how can this sham of a "stimulus package" help the housing market? How can it help the economy? Where is this money coming from? Are we not being taxed enough?? The people of America are overtly being robbed.

Most homeowners are spending thousands of dollars every year just on property & school taxes. Home buyers (the brave and few) are lowering their sights and buying less expensive houses so that they can pay these taxes. Heavy taxes. The People of America are going to suffer unending. It looks as though the economy and the housing market are going to suffer more & more & more & more... Stop frivolous spending pres. obama. Look to former President Regan's policies. President Regan lowered taxes. The economy did rebound. Lower taxes and stop trying to socalize America--we don't want it!. Stop spending the tax payer's money!

Instead of forcing families out of their homes and selling them to investor for $.50 or less on the dollar, who in turn makes thousands of dollars as resales, why don't we adjust the homeowners penalities and refinance to accomodate for those in hardships, ie loss of jobs, medical, ARM, etc. Really help the
average American instead of those who don't need help. Mr. President, the housing market is a significant way to booth the economy. So fix the foreclosures and lessen the mortgage requirements and give the
keys to the American dream..

My vote:
1. Every single homeowner who paid their mortgage last month should automatically be given a new interest rate on their loan regardless of the number of years left on the current loan, the property value, jumbo loan or not, or credit-worthiness of the homeowner. Just drop everyone now to 3-4%. It will immediately free up CASH in the pockets of every single homeowner in the U.S. and most likely that will go to pay for new "things" thus stimulating the economy, or will go to pay down consumer debt, which will help the banks.
2. Cap the amount of interest ANY credit card in the nation is allowed to charge for the next 2-4 years at 10% or lower. With prevailing interest rates around 4%, anything over 10% should be considered USURY and should be illegal.
3. Loosen up credit requirements for investors. If you have a proven track record of wise property investment, or a business plan that works, you should not be limited to 4 mortgages. Just because every citizen had to jump on the property ownership bandwagon doesn't mean those of us who invest in property AS OUR LIVING should be penalized by their irresponsibility! It's a great time to buy, but a large portion of our buyers are shut out of the market right now by no access to credit. Give investors credit and watch the foreclosure market constrict quickly.

What I'd rather see with the money earmarked for banks? Give it to the people - either by directly lending mortgages and cutting out the banks, or in the form of cash - that will stimulate the economy immediately! For all you free-marketeers out there, now THAT's a "free market!" If you think that you live in a "free market" right now, I believe you are mistaken, it's not free, it's run by big business. If you own a Fortune 500 company, then you should believe in our "free market" but if you don't, take the blinders off, the market is controlled by Big Business, it is in no way "free." Just like we are a "representative democracy" we live in a "representative free market society."

Just my 2cents from the 50th State! Katie Minkus, R(B). It Takes Courage to Live on a Rock!

If President Obama could change or fix anything about the housing, it should be to have complete disclosure from all of the lenders, mortgage professionals and real estate professionals as well. There were far too many illegal practices that occured over the past 3 years that has resulted in a mortgage debacle.

Now homeowners are foreclosing on properties that they were not qualified to purchase in the first place. So called investors who purchased properties for rental income are bailing out on their tenants, leaving them essentially homeless. And in the end, all of this has affected innocent homeowners who have to witness their property values decrease by as much as 50% and the local taxing authorities still want to tax these homeowners on their past market values and not the current values that are really the truth.

So it is not only up to President Obama himself, it is going to take everyone to fix this housing issue. Greed has no place in our economy now, so if corporations, executives and investors can not comply or disclose, then they should not participate.

MeLisa Minter, MBA, Realtor http://www.homesmint2be.com

The cause and therefore solution to all this is Immediately stopping (!!!) the de-valuation! Everyone, not just the president must play a part. Banks that were lent any money by our government (ie- your money and mine folks) MUST lend it NOW, or lose it (if they fold because they were hoarding it for their books, then they weren't viable in the first place). Buyers in this market need to Stop being as greedy as the Wall Streeters that helped get us here along with the full support of a sleeping Congress and regulators that did not regulate. With these current interest rates (old timers know 7-8% is normal!) there are so many ASTRONOMICAL bargains out there that if anyone intends to buy this decade, they should DO IT NOW. Realtors/Brokers need to toss out an outdated "order-taker" model (list on the MLS system, plant 'for sale' sign, print flyers, be everyone’s best friend, wait). It’s Time to SELL again! Use of the word Reduce or any similar phrase must come only after dozen’s of well researched and thought out ‘Value propositions’ regarding the property. For Instance- ”Do you know what this was selling for 2 years ago?” “Do you plan to sell in the next 2 years?” “If no, why is today’s price of concern?” “Is the property where you want to live?” “Is it well LOCATED (remember that lost mantra?) near accessible jobs, roads, cities, good schools, shopping, entertainment, culture, good infrastructure, offer quality of life, and so on”? Sellers – some of you are still somewhat over priced and MAY need to come off further. Overall though, allowing price reduction as anyone’s First, Second or Tenth response versus actually SELLING is un-acceptable. With EVERYONE on the same page and no longer relying on the now entertainment industry (formerly known as the news media killing us all with constant Gloom and Doom), we WILL get through this. Bottom Line, STOP the de-valuations NOW. The Presidents role? IF and ONLY If necessary, the President can set that ‘floor’ using for example, average tax assessed values to temporarily enforce values... this helps banks with a set asset number/valuation, helps municipalities that are relatively independent keep a strong tax base (and there bond ratings) and sets a FIRM floor for all prices/values (again, temporarily). This would be necessary IF the rest of us (see above) do NOT do our part. Thanks to all.

Linda: AMEN TO THAT !!! The biggest joke bailout is the Big 3 - they made the mess, the unions made it rather and the companies allowed it now they come whining to the govt for help - give me a break.

And while I am on a roll here and sorry if this offends - well I am really not sorry cause I am going to say it anyway - but the biggest crock that the govt allows today is the Earned Income Credit - how many people know that if a person is on welfare all year, no income at all, never pays into the fund for the taxes they still can claim each child and get a refund ! For WHAT ??? They didn't pay into it for one thing and for the other they are already living off of the govt

What a great way to make a living - not work and let the govt take care of them -

AND the illegal situation needs to stop NOW !!! There is over 33.8 BILLION dollars spent each year for the illegals in this country - not to get rid of them but to let them stay here and enjoy a quality of life that alot of US don't even have - health care, subsidized housing, welfare - yes WELFARE - the govt gives out special SSN's to illegals for the sole purpose of them collecting flipping WELFARE !!!! UNBELIEVABLE !!!

While I sit in a home I worked my butt off to get to this level of home and no work for the last 7 months in spite of being college educated and 25 years of experience and if I get sick - god forbid - I have to deal with it. Right before I got laid off I had teeth problems and I am now losing my teeth and no way to get them fixed - I am sure that makes a really good impression on possible employers huh ?

NoBAMA is NOT the answer and never was

This is a fantastic question! Nothing that has been done so far has worked so this can't hurt:

1. Allow the $7500 tax credit be used for downpayment assistance (as opposed to a tax credit), sure they should still have to pay it back but maybe over 10 to 15 years on income taxes. Make it permanent for the foreseeable future.

2. Foreclosures are killing property values (eroding paying owners equity/wealth--sooner rather than later this becomes an issue of personal security not good of the country or pride). Immediate meaningful, manageable restructuring must occur to keep people in homes (I do not believe in reduction of principal amounts or forgiveness of debt) but extend the debt out to 40 (even 50 years) tack amounts owed on to back end. Lower the interest rate to 3, 4 or 5 for 5 to 7 years, then 7 fixed thereafter. No prepayment penalties! Oh yeah, and don't slam credit reports. (there should be some kind of reward for working through your difficulties) We need people to be able to refinance and restructure when they are back on their feet.

3. We need affordable housing! But many of the already foreclosed properties are in no condition for first time homeowners (or eligible for the low or no money down options (thinking RD here...nothing subprime)--the banks should have them up and running, liveable meeting FHA standards. They got a bail out, have them reinvest in affordable housing. I do not feel bad for them, they risked and failed so now they can invest in fixing the problems.

4. So what about the folks who are paying, but are losing value everyday (their nest egg, their retirement, college educations--their perceived wealth)? How do we sweeten the pot for those still paying the freight? How about the lenders supply a little shot in the arm...a little rate reduction? Maybe some money thrown into an untouchable savings account? I appreciate paying is what we are all suppose to do...but kind of a tough sell when Wall Street, Washington, Huge banks, car makers do not have the same rules applied to them.

5. Without jobs all of it is useless. Many big corporate employers have been bailed out, so scale back on corporate jets, junkets, bonuses, well appointed offices and such and hire some original thinkers to help get all the regular people out of this spiralling bind.

6. Streamline it all! This is the computer generation, make the government loans fast and flawless...do not leave people cooling their heals for 6 to 8 weeks.

It is NOT up to Obama to fix any Free Market Society condition.
It is up to him to help make corrections easier by allowing the people to do it themselves.
By staying away of it
the help will be done.
Free Markets will heal themselves.
So Thanks but no Thanks.

Obama should let homeowners borrow the bailout funds to consolodate their debt and refinance it. in most cases this would be 20% of what they owe. They could combine their loans in some cases like car loans and credit card debt inot one monthly payment. A small Tax increase would help fund the program. Those who do not need a bailout would get a tax rebate with interest for the amount of the increase. Those who do get a bailout will be ineligable for a rebate.

The problem is, that in these refi's the homes would be revalued, to a much smaller amount, and thus the mortgage backed securitie's would also fall, with the stock market, but it has to happen anyway, and this way the banks books would be balanced and the home based economy would be reset and begin building again. I'm a builder in so cal, and right now we enjoy the cheapest labor costs in 25 years. Business is booming because everthing is cheap. No one wants to buy a house for 400 per square foot when they can build a bigger better one for less than half of that. We're getting ready to launch our pre fab site fixed homes in Arizona. Up to 3,600 sq ft at $41.00 per square foot with in house financing. No agents, no brokers. No homes in the souuthwest are worth any more than that and these are far superior in every way.

Obama must fix the problem from the bottom up. Give the banks the money, but through the homeowners in the form of conditional low interst government loans to consolodate debt. new innovations in building will devalue the market, and the gov's poor attemt at keeping home prices artificially high to protect the stock market will fail. The TARP program does nothing for the affordability index, and paying off bad loans for the banks causes them to have no incentive to work with troubled owners, since the bills have been paid. It's much easier for them to foreclose, and make more money in a short sale for xtra gravy. Now with even tighter credit and more restrictions ,very few people will be able to afford a conventional loan. I'm following the Toll bros route. the builders are going to take over where the agents brokers and lenders failed and keep it all in house, and so far the results have been astounding. No Agents please.

While I totally respect Jonathan Miller, and love his Matrix blog, I must slightly disagree with his laissez-faire suggestion.

We have gotten to a point where the prospect of further free-market correction in the housing market is too painful to American society at large. One of the big three banks -- Citi, B of A or JPMorgan Chase -- is almost assured to fail given the declining mortgage assets on their books. And that will make the failure of the other two even more likely. Serious intervention must be undertaken to stabilize the housing market, which is the root cause of these bad assets.

The reason we're in this position is because the government failed to regulate and protect American citizens -- and investors -- from the outrageous financial derivitives that were created. Government action must be taken to correct its previous inaction.

The popular notion is to create a "First National Bank of Bad Assets" with that remaining TARP money -- which is kind of what we all thought they were going to do in the first place. And today, I heard a great second step suggested by CNBC's Jim Cramer: A tax credit to stimulate purchases of existing homes to clear the inventory.

OK, Mr. Obama, there's my two cents.

Pass tough licensing laws for loan officers.

Pass much tougher licensing laws for RE agents and brokers than are in place now. (

(Yes, I know licensing laws are controlled by the states, but put pressure on the states to require more than they do now which is not much more than a hearbeat and a few hundred dollars)

Increase penalties for loan officers and RE agents/brokers that are proven to be unethical and/or break local, state and federal laws. And don't leave it up to just the companies or NAR (or even the state boards) to do the policing and enforcing of such laws because they're worthless for that.

Don't try to fool people by trying to pass off tax loans as tax "credits" (that whole $7500 crap). Actually pass tax "credits" or other things that are truly helpful to home buyers and be honest about what they really are.

The point of free markets is that they correct themselves eventually. What we should be focusing on is the bigger picture housing problems - namely, the affordability and quality of housing available. When you get down to it, TARP is trying to keep families in homes they can't afford - they couldn't afford them then and they won't be able to afford them in the future. The program isn't sustainable in the long run without a stronger economy.

A smarter approach would be to focus on getting families into decent homes that they can afford - and maybe that means renting instead of owning. Right now, greedy housing developers have built absurd amounts of townhomes and condos that simply aren't selling because they are priced out of range for most people. The housing developers need to focus on building good housing at a price the market can support. So I'd suggest that Obama put money into local housing projects to renovate existing trashed or under-occupied buildings to make them liveable, and improve community safety and education services to make those areas attractive. That would have the biggest impact on some of the most overlooked families. And projects like this have the added benefit of providing more jobs to stimulate the economy :)

Other ideas that have been floated that I like are federal housing funds to help provide or subsidize housing, corporate housing programs where companies provide or subsidize housing for their employees, and a dedicated pre-tax savings fund to use for homes and home renovations. A problem that I would love for him to address in some way is how you get people from renting to buying - whether that means having more rent-to-own programs, or maybe it means having a way to apply monthly rent to a down payment. We don't need more houses - we just need the right kinds of houses.

The government needs to focus on initiatives that produce profitable results, otherwise we are going to all be bankrupt. Create jobs that will create more jobs and raise the confidence level of all involved.

There's a link below that discusses Ten X Stimulus Processes. He makes sense.

Create a "homebuyer's savings plan" where pretax income can be used to buy a home. The government can also use part of the bailout money to match a portion of the savings.

Thanks for seeding this discussion. See real estate reforms proposed earlier this year:
http://www.utterli.com/u/utt/u-ODAxMTYwOA#utt-ODAxMTYwOA

and preliminary responses to changes proposed at ConnectNY
http://friendfeed.com/rooms/recall

Your questions, proposals, and participation are welcome at this real estate round table debriefing post ConnectNY & REBarCampNY
http://tinyurl.com/8clp6w

Virtual participants, both consumers and professionals, are welcome in this open discussion at the Berkman Center for Internet & Society at Harvard Law School. President Barack Obama was elected the first black president of the Harvard Law Review in 1990.

Get the mortgage companies that were given bailout monies from the government to, in turn, loan that money out to people to start BUYING! This will cut inventory and lower the supply.

He could help raise prices of properties by eliminating some of the "stale" inventory. Some older foreclosed homes that are damaged and deteriorating are still sitting on the market driving down prices after years of vacancy in good neighborhoods.
I wrote a blog a few months ago here http://activerain.com/blogsview/787390/How-to-Solve-the-Hous…

I am 51 years old, female with two degrees and over 20 year of experience in my field. I got laid off last September and am unable to find work. I out 28 grand down on my home and spent over 20 in remodeling costs. After being unable to pay the last 3 months - THREE months - I am out the door as of October 16. So GOOD JOB Mr President - while you have been tossing money at companies like GM I will be in the streets !

And I don't give a flying FU** what anyone says - I got this place as a complete and utter DUMP and that's EXACTLY the way the bank is going to get it back. All the custom made oak cabinets will be taken out and sold along with the dishwasher, stove, fridge, washer and dryer, ceiling fans, chandelier - andything I put in here I will take out

Tell me I can't and I will tell you to kiss my butt ! I know how my sale agreement reads and it says I have a responsiblity to keep the home in a LIKE FASHION - well fine, the home had none of the above mentioned things when I got it - and thats exactly how it will be left when the time comes.

And I will NEVER work with another realtor again - not ever - well if I do I will NEVER trust one again that's for sure. I got screwed on this purchase at every turn - lied to - and then directed to a contrator BY the realtor as someone reliable and honest that ended up taking off with 20 grand and the job only done 1/4 of the way. So FU** all realtors but most of all FU** OBAMA !!!! He has done NOTHING to help the common people - NOTHING

I am tempted to have some well off friends of mine go and buy my property in the auction in October and then arrange to sell it back to me - I bet my 180 grand home will be sold for 50 maximum. Homes here in the Phoenix area that were going for over 200 last year are now going to less then 100

As long as Obama is allowed to stay in office the longer this country will continue a downward spiral and do NOT dare come out here and say that this is still all previous leaders fault. That excuse is getting OLD !! Step up to the plate and realize that Obama LIED to all of you that did vote for him - he has done NOTHING good for us in the last 7 months - NOTHING

As a taxpayer, I also do not want to pay for irresponsible borrowers, fraudulent investors and irresponsible homeownership as stated earlier. Having said that, when an individual hires a State licensed realtor who then provides detailed market comps suggesting a realistic and expected net sold price and time range, then advises his sellers to go ahead and purchase at or near that amount in their new area and THEN the market collapses....why is ONLY the seller stuck? What about the poor professional advice? What about the appraisers certified value information, knowledge and expertise? What about the Lenders knowledge and expertise? Heck, the lender accepted the appraised values & loaned money based on those values so why shouldn't they hold true regardless? Fact is the market took an Historic turn & tanked yet only the seller is getting screwed and all for doing precisely what lenders and realtors sell them on doing everyday… ‘use an agent’! This MESS is about confidence across the board and everyone MUST play a part in the fix. REALTORS can protect their own livelihood and futures and start SELLING again versus suggesting reductions as the first, second and third answers. You DO have more than one answer, yes? Highlight the features and benefits just like in day’s past when SELLING was required. Networking, daily? Making pro-active phone calls to past prospects, buyers & sellers? Why not? Contact everyone you know for referrals! Set up seminars-lenders, consultations on credit, mortgage brokers, etc. This continued Recession is due to continued de-valuation, stopping that by any and all means is critical. I vote for an industry wide return to the Mantra- 'Location, Location, Location'! Sell that… Sell this as, and it is, the 'best time in a generation to buy'. Have you calculated the properties value decline the last 2 years and incorporated that in your pitch – 35% DISCOUNT already in place! What about the FREE money now available (interest rates under 6% = Extreme FREE money…check history and rates over time). Promote the fact that the Greatest Housing Clearance Sale in nearly 100 years is now underway and give that the urgency it deserves! “Life isn't about waiting for the storm to pass, it’s about learning to dance in the rain!" Start dancing and make some money!

I haven't read all the answers below but my main concern is that the banks get the Short Sales moving faster.
We have buyer wanting properties but they walk away from short sales, 4 or 6 months waiting for an answer from the bank to find out is they have excepted your offer. Most of the properties are SHORT SALES not REO's.

Don: If the loss on a sale is forgiven on your taxes, then it's only fair sellers should pay the full income tax rate on any capital gain on the sale of their home (i.e. we should repeal the Clinton-era tax exemption for sellers who sell a primary residence they've owned for a certain amount of time). Selling a house at a loss is often the consequence of a bad financial decision (buying a house you couldn't afford), and so giving those sellers preferential tax treatment for that kind of a screwup only incentivizes bad behavior. As a taxpayer I am not interested in subsidizing irresponsible homeownership.

We are not going to fix the foreclosure problem thus the declining home values, by having having the government buy toxic loans from the banks. In fact we are providing incentive for lenders not to work with distressed homeowners as they are waiting for the bail out funds to eliminate the bad debt on their books!

Bank Bail Out is Flawed

If the government were to provide temporary financial assistance for homeowners who have lost jobs or are now under employed we could help prevent far more foreclosures dragging down home values. One mortgage of $400,000 could help save at least 40 homes owners even if the payment help was for $2,500 per month for 6 months. Look at how bank owned properties and distressed sales are dropping market comps thus decreasing home values.

Obama administration needs to deal with tax law that still taxes consumers for on the difference between the sale price on a short sale and the loan balances outstanding. This is crazy...anyone believe this is income.

Divide the bailout money among all of the voters in America. Let them go out and spend it, pay taxes on it, both Federal and State. Let them pay off mortgages and buy new homes and cars. Let them go shopping, pay college tuitions and invest stocks and bonds. Let them have the option of being able to afford their own health care and feel free to take a vacation. Look at how many sectors would benefit from this idea.

Don't put us further in debt by letting Congress do their usual bumbling by bailing out the rich, and so- called failing businesses. What do you intend to do about all of the self-employed people who don't even qualify for unemployment. Extending those benefits doesn't mean a thing to that whole group of people. You bet it is time for change, let's get it done now.

L Dunn

I agree with Rob Robosky.. Put the money in the hands of the taxpayers if they really want to help the homeowner.. This bail out money will never see the homeowner that truly needs help.. So many fees to refinance or take and add to the loan is no solution .. The money will only go to the lenders and attorneys negotiating the loan with the lender for you. I heard a senario where it woud be an additional $15,000 added to you loan which is only a temperary fix.. This will have to be delt with furthur down the line. Lets help the citizens of the US and get out of this fix . People need a place to live.. Just not all the things that credit cards buy.. Get out of this situation and don't allow the credit card companies to do business and charge large amount of interest and fee so that you never live a debt. free life again Put the real criminals out of business and teach them to have a heart.. If you have ever delt with any of them you know what I mean. Greedy
Betty Thompson

She should lower lending rates.

The President should stop throwing our money away. Bailout, stimulus, etc. Geez, all we are doing is continuing on the same old Bush tactics.

Figure out a way to stop throwing families out of their homes instead of rewarding the same old CEO's who caused most of this mess.

Too much spending got us where we are....so why dig the hole deeper.

Mr. President, stop this insanity.

I think that the stimilus plan is not the answer. Government has already spent billions of dollars for what, no one is accountable. This next plan includes creating jobs with 1 in 5 being a government job and you know they won't go away. What should've happened was distribute to each American Taxpaying Citizen a portion of the first bail out. Each citizen I think would've netted (after paying taxes) somewhere in the $300K range. And let the stimulis work from the bottom up, with accountability of course. If a person blew through the $300K then they're on the hook for it. A person could buy a new car - help the auto industry, new purchases on American made goods - stimulate the retail market, investing - help Wall Street, purchase a new home - stimulate the housing market.

As an agent and foreclosure specialist, I have seen many instances where homeowners have not been receiving any assistance to stay in their homes. If the government is giving money to the banks, the banks must be forced to modify loans to allow borrowers to stay in their homes. The dust has been settling now for over two years, and I think a little government assistance for homeowners-some of whom have simply lost their jobs--would be the best thing for this economy. I know of many cases where the banks dinked around while the owner had short sale buyers who got sick of waiting and walked away. The homes went into foreclosure and the banks have them listed now for up to $100,000 lower than what they could have received last year in a short sale. Stop making it favorable for the banks to foreclose. I have heard there is something in their balance sheets that gives them a tax break. I guess I could go on and on.

President Barack Obama,
or whoever has his ear.

Lets put the money directly into the hands of every tax paying american and not into the banks or the pockets of wallstreet. Do the math; give each tax payer $400,000.00 = $56 billion (appox). After whitch the goverment would recieve $24 billion(appox.) in tax reveune. What would happen? Personally I would pay off my car, reduced my mortgage amount and pay off my credit card debt. I would be giving money to the banks and fueling the econony myself , Now what would happen? I would sleep at night, be happy and get on with life.

P.S.
I would even watch the evening news with Brian Williams once again.

my web two cents,
Matthew R.

First off Obama can resign office and that would make me ecstatic

but uh for the person in Detroit who is putting us all into categories of greedy whiners - uh sorry buddy, at age 50 as a first time home buyer don't take it out on the rest of us that saved and worked our butts off to buy our homes, I have owned 4 homes all on my own, a little helpless female all the while getting my degree and being successful. It's not our fault that you haven't had the means to save enough to buy a home until now

And no before you even dare say it - I had no man helping me with any of my home purchases, when I was married we rented

I heard this from a Real Estate meeting the other day. The fastest way to sabilize the housing market is to adjust and fix everyones (exisiting homeowners and new Buyer's) interest rate to 3% for the present time. This will free up money for those that are paying theirs mortgages to spend, help folks that are struggling to make their mortgage payment and entice new buyers. In essence the taxpayer's should own part of the banks that received TARP funds as this is our money that they used to purchase other banks with no accountability. Further I see no relief in the lastest stimulas bill about ready to pass unless they are willing to let foreclosed persons pitch a tent on the new $200,000 million lawn the the Mall

Ric Gaines

You greedy lenders, banks and homeowners make the rest of sick.
Finally at 50 years old renting in Bergen and Morris counties of Northern New Jersey
home prices are coming with in reach. When I should be considering retirement I am
home hunting as a first time buyer. Capturing The American Dream should not be so
difficult for the average person. My parents house just sold for $600000 that they had built
fifty years ago for $35000. There should be very little crying.
John D.

Chris, Jonathan, Pete, Mr. President, etc...

I agree with Chris that free market correction is just too much pain for our society to endure. That's why I said we could endure a tooth extraction without pain med, but is that wise?

The market could correct itself without intervention. Because it can, does not mean that it is the best way.

Deborah

It is all about jobs and securing consumer confidence in the process. Until consumers feel somewhat safe then spending will not spur the economy or the housing market.