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Surviving the Housing Crunch
Last Thursday, April 24, 2008, State Assemblymember Lori Saldaña (D-San Diego, 76th District) hosted a Home-Ownership and Mortgage Resource Fair held at the CalTrans building on Taylor Street. Assemblymember's Saldaña's seat is up for reelection on the June 3rd ballot, although she runs uncontested this election year.
With every major presidential candidate forced to speak all over the country about the economy, (i.e., NAFTA, ethanol and corn crop production in conflict, rice shortages, food prices rising, gasoline prices soaring), the housing crisis could arguably be called, along with high oil prices, a major component in why the country faces a tough economic road ahead.
I was pleased to see a local Democrat take initiative and organize an informational event such as this, even though it might not affect me personally the same way as it will those people choosing to remain in California. (My husband and I plan to move out of California to improve the cost of living.) Still, the event impressed me enough to convince me to cast my affirmative vote for Assemblymember Lori Saldaña.
During the event the best resource by far I found for homeowners struggling to avoid foreclosure was the San Diego Home Loan Counseling & Education Center.
The San Diego Home Loan Counseling & Education Center is a Housing of Urban Development (HUD) approved, certified non-profit agency that offers (among many other services): budget and credit counseling; counseling assistance for re-qualifying as a home buyer after foreclosure; and default/foreclosure counseling services.
The fees for these in-depth counseling services are charged on a sliding fee scale however, Mr. Dean Brown of the SDHLCEC told me that right now the fees are waived (free!) thanks to grant funding. These services are free or very moderately priced otherwise, and the consumer value must be very high.
For first-time home buyers, there were lots of resources, such as the California Housing Financing Agency, the Housing Opportunities Collaborative, and especially great for veterans who are first-time home buyers, the California Department of Veterans Affairs home loan program.
For consumers ready to file a grievance against a lender, broker, real estate agency or other business that misleading buyers into unprincipled deals, the Attorney General's office has a consumer complaint division that takes legal action on the public's behalf. However, for this system to work, consumers must file a complaint. The good news is that it's a straightforward process.
The Housing Fair provided a place to consider the consumer's role in a sliding economy. I hope readers use the information and consider which candidates show leadership beyond hoping to be elected this year.
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I survived the housing crunch by not getting greedy and not risking everything on a speculative investment based on a national ponzi scheme. Credit will start flowing freely when homes are worth way more than the loans people are trying to use to get them. That means we NEED to see a much larger drop in the housing market before we get there. Anyone who is trying to hold on to a house that they CANT AFFORD is living beyond their means at everyone else’s expense and IS a speculator. Do people understand that inflation and the value of a dollar is tied to housing speculator bailout?
I hope that Saldana informed everyone that the deal that most people struck with their lenders was that they could just walk away from their houses. Many are and should just walk away. For many people this would be the best financial decision EVEN CONSIDERING the effect on their credit scores. The borrowers meet their obligations and pay the penalty of losing their down payment and the lenders get what the they should expect for lending to people who can’t afford the home. The home gets resold at a more affordable price to someone who has wisely been waiting to buy a home. Hopefully Saldana suggested walking away as a wise and honorable option.
I’ve been searching for first time home buyers resources for Australians, but keep coming up with American results. Either I’m searching the wrong things, or there are just plenty of quality articles like these helping people inexperienced in real estate in the states.
Greetings from Australia, Mike! Best of luck on your search for Australian-specific housing information. It’s good to hear that there are plenty of articles on first time home buying in the States. It’s just too bad that it took so much grief for information to proliferate. Maybe the information was always there, and people weren’t choosing to do their due diligence as you are doing.
The foreclosure discussion goes on in the 2008 election coverage: http://www.nytimes.com/2008/06/15/opinion/15sun1.html?ref=opinion
We’ve put together a collection of foreclosure help blogs started by people that are actually facing foreclosure now, and they’ve found some pretty ingenious ways of pulling through and surviving --truly inspiring.
Just went to the help blog, “Even with slow home sales, there are ways for desperate owners to get out of a mortgage”
The easiest way is to walk away from the mortgage. THe worst way is to ask the government to bail you out directly or indirectly. Indirectly by forcing interest rates down, letting inflation go up and the dollar drop (causing oil prices to rise) OR by getting loans backed by the federal government.
good responses san deigo, good read
The credit crunch, as it’s known in the UK, is affecting the commercial property market as much as the domestic one. Companies are laying people off already and I don’t see things getting better very fast.
What Owl said about avoiding the housing crunch also apply to the commercial market. Indeed, the combined impact of a change in strategy in the commercial market would probably be enough to take us out of this mess.