President Obama gave his last State of the Union address on last evening, 1/12/2015. Unfortunately, for those of us in the housing and mortgage lending industry he did not address or even mention anything about a housing policy targeted to help more Americans realize their dream of homeownership (Speech).
A dream that has been dealt a severe blow resulting from the financial crisis of 2008, subsequent regulatory and lending policy changes, declined housing values, a weak economy and job market with stagnant income growth.
Yet, the President touted the advances made in all these areas and indicated that we Americans are now better off than we have ever been. If you say otherwise, it is mere fiction. I wish that were true.
The lending industry is doing whatever may be possible to provide more potential homebuyers with the financing needed to purchase and own a home.
Some of these programs are a little risky. Such risks can backfire and result in a repeat of 2008. Then who will get the blame? Unfortunately, we’ve seen that movie and know how it ends. Lenders and the Secondary Markets need to be very careful not to stretch the envelope too far.
These programs allow for more options for a consumer to get the financing needed to buy a home. Some with no or very low down payments, others with reduced credit standards and still others utilizing non-traditional income to help qualify the borrower.
All are innovative and reflective of an industry trying to do its part to help consumers while helping itself stay in business. A business that is crucial to the ongoing growth and success of our economy.
Yet, there was no word from our Leader on any housing policy programs. Actually, the industry doesn’t need more government intervention – what is needs is a strong economy. We need an economy where consumers have the confidence in their employment, income and the opportunity for growth and advancement.
If our government can provide an environment conducive to job and income growth, the lending industry can do the rest. However, until that environment exists and consumers have the confidence that they can buy, and continue to afford a home, the challenges will continue.
I guess these are the challenges the industry will face alone. In these challenges lie opportunities. It’s up the industry to identify these and do what it needs to do to take advantage. Seems we’re on our own. Maybe that ain’t so bad after all.
Lend responsibly my friends.