Legislation to Avoid Foreclosure
While we’re constantly bombarded with news of the latest proposed legislation to “solve the foreclosure crisis,” even the sponsors of the bills are already admitting that these are band-aid measures at best.
Barney Frank, the main architect of the American Housing Rescue and Foreclosure Preventino Act, recently acknowledged, that even if this bill passes, “you may need more” to help homeowners avoid foreclosure. What worries me is what he actually means by “more.” Typically, when a politician says we need more, it’s more spending and more legislation.
We’ve all heard about doing the same thing over and over while expecting different results is the definition of insanity. Despite the fact that the SPONSOR of the bill is already realizing that this “solution” will fall short, somehow we all know that once our legislators get hold of a hot button issue, they won’t stop interfering until they’ve sucked the last drop of publicity and lobbying dollars out of the situation.
I commend Mr. Frank and Mr. Dodd for attempting to address the situation, however both are severely handicapped: legislation is a blunt and unwieldy tool, which typically unleashes a host of unintended consequences. Often, the collateral damage is not foreseen by legislators or industry experts.
Fortunately, we the people of the United States, already understand that this problem is going to have to work itself out. In a recent poll, 25 percent said Obama and 17 percent said McCain would be better able to handle housing prices. I think we all realize that neither is going to be able to do much for those wanting to avoid foreclosure, and stabilize housing prices. I think it’s clear that the choice in this regard, is which path we’ll be forced to take in failing to fix the foreclosure crisis.
Even the industry experts say that this is not going to be solved overnight. Nicholas Retsinas, director of the Joint Center for Housing Studies said recently, “The slump in housing markets has not yet run its full course.” Pointing to a number of factors, he says that improvement is not yet in sight.
Even the press has acknowledged that state legislation’s impact is not going to be effective- the opportunity to truly be helpful has already passed.
My hope, personally, is that we do see signs of improvement before we see a host of new legislation enacted. Most of the proposals are addressing issues that occurred in the past. Much of the focus is on ensuring that “this never happens again.”
If you spend just a very short time researching what led to this “tsunami of foreclosures,” you’ll quickly realize that the confluence of events that caused it are unlikely to ever occur again. This is regardless of whether or not they pass a single bill to “solve” this issue.
If you are behind on payments, do not expect any help from federal, state or local government- PLAN AHEAD. If you’re in default, and you need foreclosure assistance, do something about it now.
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