St. Louis Real Estate – HUD – What’s the Delay?

What’s the Delay? by Chris Scheer, Branch Manager, Cornerstone Mortgage, O’Fallon, Missouri

Super_money Here we are, one week after the announcement by the President to try to help homeowners who are struggling (Fox News), yet not one investor, i.e., Chase, GMAC, Countrywide, Citi Mortgage, or any of the other major national mortgage banks is ready to start selling these loans.

Who is going to step up to the plate to start rescuing homeowners?

Right here in St. Louis there are over 600 properties in St. Louis City and County that are for sale from foreclosure. That number has tripled in the last 6 months. We are at the beginning of the problem. At that rate, next March we will have over 1800 homes for sale that have been foreclosed upon.

If we are a snapshot of the country, why are the major mortgage banks dragging their feet?

Most people in the industry know that HUD will insure these loans, however until HUD gives written guidelines no one is willing to stick their neck out and originate a loan that may not be insured. Meanwhile, people who are late on their mortgages continue to struggle with the situation. Most are taking the ostrich approach and burying their head in the sand hoping the problem will go away. While they do this their credit gets worse and their credit scores continue to fall. The guidelines that HUD will issue will dictate a minimum credit score, so while HUD drags their feet, scores are falling and people that should get relief won’t due to governmental and political delays.

I challenge the top executives at the major mortgage banks to step up and use common sense. We know all about what the guidelines will be. Start originating these loans and let’s start helping people. You may end up with a few loans that can’t be insured, but how many people will be helped? How much goodwill will be created? How much will your servicing portfolios increase in value as you help stop the decline of delinquencies? So what if you end up with a few million in loans that you can’t sell. Get them to perform for a year and then refinance them out of the loan that wasn’t insurable. It will cost you less than it will to foreclose!

Chris Scheer can be reached at chrisscheer@stlouisrealestatevoice.com

Tags: HUD, Conerstone+Mortgage, Foreclosure, GMAC, Countrywide, Citi+Mortgage, Chase

This entry was posted on Monday, September 10th, 2007 at 2:43 pm and is filed under Mortgage News, Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

One Comment »

St. Louis Real Estate-Don’t Give up Yet! said:

[...] Also, read Chriss Scheer’s article posted on this blog; “St. Louis Real Estate-HUD-What’s The Delay?? If Chriss’ predictions are accurate, how many more homes will we see on the market next year as foreclosures and pending foreclosures continue to increase? With an increase in inventory next year, it may be even more of a challenge to sell your home in a reasonable amount of time. [...]

# 10 September 2007 at 2:56 pm