The holidays are upon us and I have to share that one of our traditions is driving throughout our neighborhood with our twins and seeing all the Christmas lights that are decorating all the houses. This year was quite different than years before and you are probably asking yourself what I mean. Let me say, before even in the last two years there were probably outside Christmas decorations on every third house. There were also some houses that were quite extravagant with their decorations and then others you didn’t know what the purpose was of even decorating. This year as we drove through, we were lucky if we saw decorations on one house on a street. What we saw more of was vacant houses, for sale signs in yards and doors with tons and tons of signs hanging and yards unkept. I have to admit it only confirmed to me that the mortgage trauma is not over by any means.

During this holiday season, there are people fighting for their homes and some are even losing them to foreclosure. I read a story in our local newspaper about a veteran that was losing his home because of adjustable rate mortgages. He shares how when he initially bought the home he could afford the mortgage but received assistance from a friend in the family regarding a mortgage. Now that adjustable mortgage has started and his payments went from approximately $1,000 a month to $3,000. As a veteran he is unable to afford those payments. He said he trusted that person that was a friend of the family and now it is apparent it is coming back to bite him. He didn’t really understand all the terms and figures that were being thrown at him. How often have we heard stories like this? From what I could surmise one of the only factors that made him different than the other stories was this man a veteran.

Constant stories about people with adjustable rate mortgages is one sign of a meltdown and want to call to the readers attention that every couple of days we are seeing headlines such as “Fed tightens up lending rules”, anything that says “Subprime” and the various meetings that are happening in and out of the White House. Regardless there is a lot of attention on this subject all over.

As a writer for this blog, I hope that during this holiday season that those families that have lost their homes to foreclosure, moved out before being in a foreclosure situation or even those who are facing rate adjustments soon will receive the help and guidance they need as they prepare to go into 2008. With all the different options that are being presented such as FHASecure, refinancing and even the latest bill being presented by the Senate, I encourage you all to do your homework and truly find out what is best for you. Have you ever heard, you don’t know until you know? There could be solutions from your lender or through your local bank but you don’t know because you have not read everything that came in the mail. While you are preparing to enter into a new year, take the time to seek out realistic options.

Happy Holidays

Taffy Wagner

Henry “Hank” Paulson was defending the FHA rate freeze at a speech on Monday, CNNMoney reported. The article points out that many detractors feel the freeze was too little, too late. Other opponents raised different concerns, to which Paulson had a response:

Others say adjusting mortgage contracts amounts to a bailout – free-market principles say that those to take on risk should suffer the loss when bets go bad.

Paulson fought back against critics Monday, saying the perception that his plan abrogates contracts is mistaken.

“It does not,” Paulson said. “Mortgage servicers have contractual obligations to their investors, who are spread all over the world. Servicers will fulfill these contractual obligations by pursuing all loss-mitigation options when it is in the best interest of investors, as they normally would.”

Like Paulson, proponents of the freeze warn that without it we could face a domino effect that would lead to an all over economic meltdown.

As many of you might now, I am a personal finances expert and home ownership advocate and I thought it was time I write about this. I was reading an article that was in the Associated Press titled All Business: What’s Behind Foreclosure. One of the first thing that peaked my interest was how this writer shared a simple plan for the government to stop foreclosures: here’s a simple plan: Boost Americans’ income, put more funding toward medical research and insist on marriage counseling for all. I was somewhat fascinated by that statement because I have often received the comment when going through a fast food drive through window from the workers, the price of the food continues to raise however, their pay is not going up. Have you ever stopped and looked at that? I made it a point to note that comment because it showed me that employees are paying attention. What does that say for quality of life when you are paying more for food but your income is not increasing regardless of the job you perform? Think about when gas prices increased and it seemed so drastic. Well it was drastic. Did some of your other bills begin to suffer? I know we had to get very creative because that was a huge increase for the cost of gas.

The second thing I looked at was where she says put more funding towards medical research. I say medical research and making sure everyone has healthcare. How many people are without medical care and cannot afford proper treatment? People end up facing some very hard choices – do you seek medical care and purchase medicine or are you paying for your utilities? Let’s be realistic these are choices that someone is dealing with every day, thereby making their quality of life deteriorate. It is disheartening to think that some of my elderly family members could be struggling with health and cannot really get the care they need. It is beyond a point of want and reached a level of need.

We have all heard and read how money, lack of money or finances are one of the top causes of divorces. Some might even say it is number one. So what would you expect to happen when a family begins facing foreclosure? The finger pointing started some time ago, communication has probably broken down and the couple cannot agree on a proper solution. The article that I was reading her third item was insist on marriage counseling for all. Many people probably could benefit from marriage counseling right now when facing foreclosure on relationships and finances. Why do I say this? Primarily because if they are not able to see why this happened, they will repeat the pattern. It is very beneficial to have an outside person review everything and give an unbiased solution. I will share this, when there are financial challenges it begins to affect health, work performance and many other areas of your life. When people are facing foreclosure, they probably are dealing with stress, fear and uncertainty. These feelings can cause health issues and impact your marriage. I agree with the writer of that article some of the areas that need to be addressed are income, health and marriages.

Taffy Wagner

Well, FHA has had quite an interesting year. From being a has-been in the mortgage industry to the most promising hope for borrowers in trouble, FHA is certainly making a come-back. But, as with all comebacks, there have certainly been some road bumps. The Senate has still yet to vote on HR 1852 and its own bill offers some differing options. The battle with DPAs looked to be over this fall, but will carry on into the New Year. FHA Secure was announced, but has failed to deliver on the big promises made by the President.

More than anything, 2008 is looking like it could be a much better year for borrowers. Although many borrowers will still face the pain of resetting ARMs, the country has woken up to unfair and predatory lending practiaces, as well as the need for an FHA plan that reflects the market of today. As long as modernization is implemented, this year very may well be the year FHA makes its big return.

I have to tell you I must have been a few days behind catching up on my news because yesterday I was watching President Bush talking about the housing and mortgage industry and it said breaking news. However, when I turned to other channels he was not on there. So I determined that it was more than likely a re-run of the talk he gave last week unveiling the mortgage plan. I was not really surprised by what I had heard since there was a lot of build up to the unveiling. So I listened and then went on with my day.

This morning as I was doing my reading, I read through CNNMoney’s real estate website that a House committee is scheduled to vote Wednesday on legislation that would permit judges to shrink the size of home loans for bankrupt homeowners – a mortgage-mess remedy supported by consumer advocates and ardently opposed by the lending industry. I would have to ask the question for those that oppose this, do they not believe that the housing and mortgage industry is in crisis? Let me give you an example, I read last night in our local news that
Colorado is on tract to have 37,000 foreclosure filings by the end of the year. They topped their end of the year 2006 number in November of this year. How many homes in your neighborhood say for sale or look vacant as if the people moved out over night?

The article went on to share that under existing law, judges cannot modify loan terms on a borrower’s primary residence, but can do so for mortgages on second homes. I really wonder how many people fall into the category of having second homes. Maybe it is my being naïve, I thought many people that were facing foreclosure was on their primary home. Well that is the way it appears in our neighborhood. When people go through foreclosure on a home, they still end up somewhere. What is the bigger picture of helping them keep the home they have?

The bill that is being considered on Wednesday would apply to subprime loans made since 2000 to borrowers with shaky credit, and other nontraditional loans, such as those in which borrowers only make interest payments. The more I read national news and watch local news, everyone keeps saying the worst is not over. I do believe that because it seems each quarter it is getting worse and worse. Everyone keeps having these meetings to discuss the problem and reach some viable solutions. With each meeting there are solutions being presented, however the problem continues to grow and the number of foreclosures increase as well. What is going to happen one the votes are taken on Wednesday? What viable options will home owners have that they can see a light at the end of the tunnel? Don’t miss out on the vote. Either come back here to receive an update or watch the local and national news. With all the discussions that have been going on, this is a story that will be watched and reported on as soon as the voting is over.

Taffy Wagner