COMMENTARY: Real Estate Could Get a Whole Lot Uglier....Again

Ouch. This is not good.

Every once in awhile something comes up in my "real" life that, frankly, kind of sucks. Right now is one of those times. My "real" life is Real Estate. That's what I do. Helping buyers and sellers buy and sell their homes.

And right now, federal regulators are trying to make that part of my life a whole lot uglier.

Congress recently created the Qualified Residential Mortgage rule (abbreviated QRM), to take affect this year. This regulation was intended to protect lenders and borrowers from the risky lending practices of a few years ago that have led to this debacle of Foreclosures and Short Sales. There are provisions in this rule that federal regulators are now very narrowly defining as requiring borrowers to put down a MINIMUM of 20% when purchasing a new home, or requiring hefty fees and significantly higher interest rates for those loans.

Now I don't know about you, but so far in my "young" life I haven't had 20% to put down on a home purchase. That's a big chunk of change! Not that there aren't buyers out there who can do that; it's just that there aren't very many. Honestly, not very many at all.

I think we all agree that there was some pretty irresponsible lending going on there for a few years. But the reality is that many of us responsible buyers also bought homes during that same period of time and very few of us put 20% down. I make my mortgage payment every month (have never even been late on it, thank you very much!), but if I had to put 20% down on my next house, it would be an awfully long time before I'd be able to do that (according to statistics from the National Association of Realtors, it would take the average person 14 years to save up that much for a downpayment).

Congress never intended this regulation to be so narrowly defined and the National Association of Realtors is asking Congress to press federal regulators to include an exemption in the QRM to allow for traditional loan programs similar to the loans available today; well-underwritten products such as 30-, 15- and 10-year fixed loans with from 5% to 20% down to include Private Mortgage Insurance (PMI).

Of course this is important to me because of my livelihood, but it is important to YOU because you own a home! If you were to try to sell your home in a marketplace where buyers were only allowed to buy if they had 20% down, how much do you think your house would be worth? Unfortunately, supply and demand is real. If there are 5000 homes on the market and 5000 buyers, housing prices are stable. If there are 5000 homes on the market and 50 buyers, prices will plummet. And boy, do I mean plummet.

Please call or email your Congressperson, Senator and anyone else you can think of TODAY to let them know you want mortgage loans to stay affordable!

Look up your Congressperson and Senator by clicking here, then enter your zipcode: http://www.contactingthecongress.org/.

Call or email them today. Tell them to protect America from the QRM. Tell them to keep mortgage loans affordable for qualified home buyers. Tell them America cannot afford another housing crisis.

Anyone who owns a home -- or merely wants to own one someday -- is going to be affected by the outcome of this. Please take the time to make the call.

BOOK REVIEW: "Room"

Room
By Emma Donoghue
Copyright 2010
Little, Brown & Company
Adult Fiction
4 Bookmarks

Imagine your world is an 11x11 room and the few belongings that occupy it. That is the world of Jack in this horrifyingly stunning book by Emma Donoghue. Jack is five and has never known anyplace other than Room. He sees the outside world on TV and he knows it is just pretend.....all of it. Nothing is real to Jack other than this confined area he has lived in his whole life.

Jack's mother, known in the book only as Ma, has been held captive in Room for seven years. Two years into her ordeal she has a baby and thus begins Jack's world. He doesn't know what he is missing because he's never been anywhere else. He knows nothing other than Room, Bed, Duvet, Rug, Chair, Wardrobe and Skylight. But Jack's mother is worried. Their captor has lost his job and Ma is afraid of what will become of them if he loses his house. Jack is five and his mother knows they have to escape. She comes up with a daring plan, focused on Jack. But is he strong enough? Can he do what he needs to do to get them both to safety?

I don't want to spoil the story, so I won't go into any more details. But I will tell you that once Ma's plan is set into motion, my heart pounded for page after page as the story unfolded.

Some positive commentary on the story: The author did a great job of having Jack narrate the story from the perspective of a child who doesn't know any world other than this confined space. Jack's character has such a limited understanding of, well, everything, that there always seems to be something just a little odd about how he says things and views things. The intensity of the story is incredible. From the moment you start reading, you feel the story building to the climax, which actually comes earlier in the book than expected (for which I was grateful! My thudding heart needed a break!) And, for a change, you get to find out a little bit about what happens to the character "after" the main event.

Some negative notes: The entire topic of the book was so incredibly disturbing. An unbelievably evil man builds a shed in his back yard for the sole purpose of keeping a girl hostage. He thinks of everything and leaves her no possible means to escape. As I was reading, I had a sick little knot in my stomach just contemplating this actually happening to anyone. Horrifying does not even begin to describe it.

This was a very quick read. I can't say I enjoyed reading it, but I'm glad that I did (if that makes any sense). I feel it made me, somehow, a better person. And I truly could not put it down.