- Phillip Bracken
Homeowner’s Hurt Twice
Updated: Aug 2, 2021
Policy Makers: Please Wake Up!
On July 31st, Homeowners got to face not one – but two growing Crises.
#1 is horrible and #2 rubs salt in a wound that may not ever heal!!! Homeowners will remember!
The first crisis was the expiration of the foreclosure/eviction moratorium on homeowners with federally backed mortgages instituted last year as a response to the horrible COVID 19 Pandemic. Policy Makers were compassionate enough to understand that approximately 60 million people lost their jobs throughout 2020 and were likely staring at devastating trauma (eventual foreclosure and eviction) if they weren’t provided some relief from their distress loan situation.
That compassionate relief was set to run out July 31st. There are reports of between 2-3 million homeowners in some form of severe financial distress and in many cases facing imminent foreclosure and eviction. That’s a crisis.
So many of these homeowners did nothing wrong. The government induced “shut-down” of the American economy put these people in financial distress. These homeowners were a victim of the Pandemic and are at the mercy of “the system”. Many were afforded temporary relief with a foreclosure/eviction moratorium and helpful temporary financial sustenance relief – but the foreclosure/eviction moratorium ended July 31st. At the last minute – the government regulators stepped in to extend the moratorium until the end of September. It’s a short term “band-aid” – not a solution.
These innocent homeowners will be declared guilty and removed from their homes unless Policy Makers take further actions to intervene. That is Crisis # 1.
Crisis # 2 is on many in America as well. But this one is a Foreclosure of Opportunity.
Unless there is intervention by Policy Makers to protect aspiring owner-occupant homeowners with the “First Look” opportunity to get the chance to purchase these homes that will inevitably hit the “for sale” market, you can bet the Institutional Investors will be poised to swoop in and purchase these homes with cash offers for the express purpose of renting them back to the aspiring homeowner: most likely at a rate that is above the cost of mortgage payments, ouch!
Unless Policy Makers intervene, that Foreclosure of Opportunity will continue to exacerbate Crisis # 2.
The frustration is mounting across America from aspiring homeowners unable to compete with “cash offers” from Investors wishing to buy single family homes for rental. These Investors know the capital outlay is reasonably small for them – they can get nice returns from the rent income and they get nearly unprecedented property appreciation (return on investment). Frankly – aspiring homeowners that need 45-60 days to process a loan approval HAVE NO CHANCE to compete against these cash offers from Investors.
But Policy Makers could level the playing field for many aspiring homeowners by demanding a “First Look” opportunity for owner-occupant purchasers that is no less than 120 days instead of the historical 15 days to provide ample time to market the homes, avoid “pocket listings,” and secure owner-occupied financing. While Policy Makers might not be able to dictate terms such as this for the private market – they sure could on loans (and property) controlled by Fannie Mae, Freddie Mac, FHA, VA, Rural Housing, and other “government” entities. For those “Private Market” homes that would end up for sale – the Policy Makers could easily provide a tax incentive for sellers of these properties to sell to aspiring owner-occupant homeowners.
America needs help to mitigate these two Crises.
Please add your voice to the membership of AHA and let’s all advocate together.
If we make a loud enough noise…we might just get Policy Makers to – wake up!
Join the America’s Homeowner Alliance today and receive your FREE Lifetime Membership by visiting our website at – www.myaha.com.
Phil Bracken is Chairman and Founder of America’s Homeowner Alliance and has been serving the homeownership industry since 1975.