Monday, 19th of January 2009 at 11:01:54 AMSacramento, CA, January 16, 2009 — The following statement was issued today by Scott Syphax, president and CEO of the Nehemiah Corporation of America in response to H.R. 600, a bill introduced in Congress that would reinstate seller-funded down payment assistance (DPA). Prior to the October 1, 2008 ban on DPA, Nehemiah was the oldest and largest provider of down payment assistance.
“There is an overlooked solution to today’s housing crisis and fortunately several members of Congress recognize the role DPA plays in getting us there. We commend Congressman Al Green [and additional members of Congress] for working tirelessly to support a bill (H.R. 600) that creates opportunities for sustainable homeownership, which serves as the cornerstone to strengthening a crumbling housing market and breathing life back into the economy. With foreclosures on the rise and banks maintaining their stranglehold on credit, DPA offers a simple solution without spending a single government or taxpayer dime according to the Congressional Budget Office. Further, it enables worthy families to take advantage of depressed home prices, therefore reducing the glut of homes on the market. We urge Congress to reach across the aisle and prioritize broadening opportunities for responsible homeownership in America by reinstating DPA.”
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Craig,
If the fed keeps putting money into new mortgage paper with Fannies and Freddie, the money will eventually hit the market. So far it is only hitting in the conforming mortgages. I wrote about 10 weeks ago for the fed to borrow on long term treasury’s and put the money directly into new mortgages at low rates to get the market going. I also said they should provide investor financing to get the foreclosed homes bought and rented. Investor will bring a lot of capital to the market. All buyers must qualify under normal standards.
My investigation also finds the heavily hit markets are reacting to the lower prices and lower rates and volume is picking up nicely.
The banks can not get the money directly, they won’t lend or at least not at the rate and quantity we need. When a purchaser gets a mortgage, buys a property, the old mortgage gets paid off to the bank. The bank receives the money and the mortgage is retired. If the bank’s reserves we short to retire the mortgage that is another issue for their solvency.
Hi Richard,
Thanks for the comment. I agree that we need to make money more available to the mass. Especially now, I’m noticing more interest from buyers and more transactions and it would be a great time to increase that momentum with a Federal injection. I also agree that investor financing has been neglected as well as the second home sector. I am going to be interested in seeing what the administration will do now that there is acknowledgment that there is a problem and it is critical.