Fixing our housing mess

I’ve spoken about housing issues before, mostly in reference to how expensive it is to live in this county. I commended Chris Martino on his proposal to use interest income to keep mortgage interest rates low. I was astounded to hear on the news that towns near military bases have hugely high foreclosure rates, with Woodbridge being the second highest. And I am frustrated, as many are, about the lack of action on the government’s part to help us out of the crisis.

On one hand, I think the government should stay out and let the market do its job. It will adjust itself eventually. Some of the problem with the mortgage crisis is that there were lenders who gave mortgages to anyone and tried to get as much money as they could from them. I want to see the borrowers default just so the companies feel the pain of their greedy actions.

On the other hand, I know that it can be hard to negotiate the home sale market. When my family was in the market for a home a long time ago, we had an overzealous agent who tried to push us into a home that we couldn’t afford. We didn’t have enough for the down payment and she offered to lend it to us (which, yes, is against the law). Fortunately, the practicality that my husband possesses did, in this case, serve us well. He insisted on a small house, thinking of worst case scenarios. The market dropped out almost as soon as we settled, but we never had a problem affording our mortgage payment.

The people who own homes at risk for foreclosure are as much at fault in this mess as the lenders. I’ve seen some interviews with families where the people admit they didn’t read the fine print or they didn’t think ahead to the possibility of the interest rate rising. I have a hard time generating a lot of sympathy — think, people; read, people; know what it is you’re committing yourself to. I certainly have no sympathy for investors who were looking to make a quick buck.

So what do I think about the debate in Congress? Well, those who believe that I am hopelessly liberal would be very surprised to learn that I am in partial agreement with President Bush on this matter.

I am opposed to reducing the mortgage principal on these homes. I don’t think it will help anything. Reducing the principal but leaving the interest rate intact only protects the mortgage company. There is nothing to keep another interest rate increase from making the homeowner default again.

What I think would help is reducing the interest rate being paid by homeowners. If it is the increase in the interest rate that makes it difficult to stay in their home, then let the owners pay the original interest rate. In this way, the mortgage company takes the hit and feels the pain of its unwise decisions.

I am wary of the idea being floated that would increase the FHA mortgage loan limit. I took advantage of the FHA loan program and I know it was difficult finding a home that fit into the program. But we did. I think increasing the loan limit would make it easier for people to try to get loans that they can’t afford. While I don’t think the government should be a babysitter, if you want the government to help you buy a house, you let the government set the rules.

Finally, to complete the circle I started at the beginning of this column, I do think we need to make it easier for our military families to stay in their homes. Most of the families stationed at Quantico don’t have a choice but to buy a house, and most of them came to Prince William for the schools. They should not have to lose their homes. Especially now, when the military and their families are making huge sacrifices to protect us.

Denise Oppenhagen is a longtime resident of Prince William County and can be reached at DenOp1@comcast.net.