Steve's Top 10 Ways to Enhance the Recovery of the Housing Market

Stevetn.jpgI watched a combative President Bush at his press conference this morning and it inspired me to go out on my own limb. Of course, he has nothing to lose.

So, at the considerable risk of painting a big target on my back, here goes:

1. Prohibit mortgage brokers from acting as real estate agents for the same principal in a transaction (and vice-versa). This is a total conflict of interest;

2. Establish a separate license for mortgage brokers and require an Agency/Fiduciary relationship with their borrowers;

3. Increase conforming loan limits (currently $417,000) in California to at least $500,000 (median sales price was $586,000 in July). Review every five years for adjustments;

4. Update and/or overhaul the FHA by increasing the loan limits, currently capped at $362,790. This is pretty much worthless for California and is, thankfully, currently being discussed in Congress.

5. VA Loans – see No. 4 above;

6. Require a minimum of 5% down payment (except FHA and VA) unless borrower is Bill Gates or of similar credit.

7. Eliminate pre-payment penalties or, at a minimum allow borrowers to purchase, upfront for a reasonable fee, an “escape clause” from pre-payment penalties after the first year of a loan on homes where the loan-to-value is greater than 95%. Yes, an appraisal is needed, but you would need it for a refinance, anyway;

8. Absolutely, positively outlaw the use of negative amortization loans. No matter how many times it’s explained to people, most still don’t get it.

At this point, I must take a break to go to Starbucks for Kris (it’s part of our pre-nup), so the rest of this post shall become interactive, at least until I return from coffee-land. Go for it:    

9. Your suggestion here;

(Since I, Kris Berg, have full access to the Blog Admin Panel and all authority and privilege that goes with the title of Administrator, I have hi-jacked Steve’s post to add my own #9).

Bury this in your front yard:


10. Your suggestion here;

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