Letters to the Editor

Re: 'Bernanke: Housing will get worse' (July 20)

Dear Editor:

I just have had two major-branded lenders in my office this week discussing their "subprime product." As they both name them "expanded," maybe for an image reason, one of them still has a 100 percent LTV product.

Even as a mortgage broker, I don't fully agree with the 100 percent LTV philosophy for obvious reasons. However, they are still offered. Close to 100 subprime lenders have fallen by the wayside since spring of this year. And we know for the most part they were not substantial lending brands in the market -- surprise? As the pendulum swung the other way, the underfunded subprime was severely hit while the big-boy brands were too.

The consumers who have been able to sustain their subprime loans and keep their American dream of home ownership are the winners! That's not a bad thing. Some news agency needs to find all those people who have been helped to own a home who actually can afford the type of loans they were place into. You would probably see some proud people who have achieved their home-ownership dreams owning a home in America. I wonder if those people outnumber the unfortunate who have had to give up their dreams? These folks are never given the media.

I think that there are three things that hold back the market:

1. Sellers not lowering their expectations of sale prices of their property, keeping markets artificially too high for the demand.

2. The media that keep reporting only the negative, driving more fear into the consumers and neglecting anything happening that is good.

3. The Fed because of not reducing the rates, which I think would be a little spark to the market along with lowering sale-price expectations.

And here's another thing that I think. History has shown that the spring and summer before a presidential election is good for the economy. And mysteriously in history, the economy, including housing, has started a recovery in the early days of the year of presidential elections. Of course there are a few exceptions. However, as these recoveries begin, they are then driven by the media first, and then each party using the media claiming the increases for what they are doing politically. Both are wrong. The momentum just turns mysteriously upward. In the early days of 2008 we will see a spark of direction shift upward in housing -- both construction sales and resales. And the rest of the economy will flow too.

The bottom line is this: 12-15 years ago, a real estate agent had one piece of 8.5-by-11-inch paper as a listing sheet, remember? And today, there are potentially more than 20 different forms real estate agents must fill out just to list a property for sale. Major speakers in forums I have attended recently have said, "We are just adjusting back to normal." And I conclude with this: What is normal?

Steve Snyder
Loan officer/mortgage advisor
C M G Mortgage Services Inc.
Walnut Creek, Calif.

All rights reserved. This article may not be used or reproduced in any manner whatsoever, in part or in whole, without written permission of Inman News. Use of this article without permission is a violation of federal copyright law.