Strengthening America’s homeownership

August 16, 2013

Hats off to President Obama for brilliantly discussing “A Better Bargain for Responsible Homeowners” with Zillow moderator Rascoff “ Aug. 7. This live broadcast was promoted aggressively on social media, and thousands of people submitted questions to the president.

I for one appreciate the fact that our government shows a willingness to wind down Fannie Mae and Freddie Mac, but in order to preserve our current mortgage industry, this may be slightly premature. Stabilizing mortgages, and making them affordable for the average worker, with an affordable monthly payment, is still a large challenge. Unfortunately, mortgage companies are cherry picking who they want to lend to. They naturally want a minimum FICO score of 660, with 20 percent down for the purchase.

That, plus a six month reserve in the bank for all expenses, still does not guarantee a loan.

The 13 million older Americans who cannot afford their current housing costs, and do not qualify for a refi by today’s standards, are very much out of luck. Nearly 20 million more, lower income Americans over 50, are living paycheck to paycheck to afford what they have, and are too underwater to qualify for a refi. (

The president, to his credit, wants everyone to be able to refinance at today’s low, low rates. That is promising, and hopeful to hear. However, do not stop there, as a 40-year mortgage would help our seniors even more. Remember that the 30-year mortgage was established before the 1970s, when the average home cost around $40,000. Now, the average is closer to $200,000, but wages are not keeping up. No matter how you look at it, we have a responsibility to our seniors, and anyone else who has been shut out of the refinancing market due to a severe loss of home equity, and who only played by the rules all of their lives.

Affordable rentals for families just starting out, graduating college students, those new into the workforce, those who lost their homes, also essential. We cannot stand by and allow our new citizens, our college grads, and our service workers (etc.) to have no hope for saving for a home, when they can barely afford an apartment.

This is our foundation, the preservation of our way of life, and our future, how we preserve the current housing market. Thank-you for restarting the conversation, Mr. President, but our Congress may need to act very quickly to save homeownership for all.

Sandra Ware

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