Why does common sense continue to escape bureaucrats?
As many of you may (or may not know ... irrelevant), I lost a good-paying job 3 years ago. We tried to survive and keep our heads above water, but it took six months to find ANY job and another six to find one that paid close to what I had been making. During that time, while we attempted to negotiate with our mortgage company, we eventually went into default and, after being homeowners for over 30 years who were never in this type of trouble before, had to complete a short sale and turn to renting.
Since re-gaining employment, we've been able to keep all payments current, paid much of our debt off or down and established a modest amount of savings. Now, we thought, would be a good time to get back to home ownership rather than renting. Silly us.
The FHA, we learned, instituted a "penalty box" rule which says, basically, that if you've done a short sale and the account was not current at the time leading up to the sale, you can not qualify for an FHA loan until 3 years after that sale. In normal situations, I can see where that might make sense. But why would this rule be inserted when the housing market is suffering so badly?
At a time when the government is coming up with plans to keep people in their houses -- in most cases prolonging the inevitable, assuming anybody can actually take advantage of these plans -- this rule makes no sense.
First of all, let me say that I feel very fortunate that I found a job, considering the millions who are still looking. However, I'm sure there are millions of others in our position, ready and willing to purchase a home, but being blocked by the FHA.
Secondly, anybody who's been through this knows that no bank is going to permit a short sale on a mortgage that is current. The only way that a bank will go for this is to avoid the time, costs and consequences of foreclosure.
Finally, if I'm correct and there is a significant number of people ready and willing to buy, wouldn't it make sense to vet these applications and allow some of these sales? Many of the people trying to sell homes are doing so because they might be in trouble and this will get them out of that trouble cleanly. Many others are ready to move to something maybe a little bigger, nicer, etc. Am I the only one who can see the potential ripple effect here?
In the mean time, people like us who can easily afford to make a purchase, will be locked out of the market, forced to pay higher taxes (maybe that's the real driving force here?), and live in uncertainty until we get past this situation.
Come on Uncle Sam, wake up! We're not asking for a hand-out or a bail-out. We're just asking for rules that make sense. Then again, maybe that's the issue. The only way our government knows to fix a problem is to throw money at it.