For the past few weeks, many people have blogged and blogged about the Housing Recovery Act President Bush signed in July which would put an end to the Down Payment Assistance Programs. Almost everything I read is about how we should save these programs. Do people understand why it's a good thing they're going away??
I'm so happy these programs will be gone as of October 1, 2008. There are many foreclosures across the country. Foreclosures are happening for many reasons, but one of the main reasons is that people don't have money to pay their mortgages. They are broke, and money doesn't grow on trees! They're probably not paying their other bills either.
When you give someone money to buy a house because they have no money for their own down payment, once they move in, they're still going to have NO money! If they have no money, how are they going to help maintain the house? It's not like an apartment where you can call maintenance if there is a leak or the AC goes out. If something goes wrong, the home owner needs to be able to pay real money to get things fixed.
The cycle of foreclosures and run down houses will continue if the programs continue. With the programs going away, hopefully, we'll get better buyers who are responsible, and when they're ready to sell and move up into another house, the first house will be in decent condition.
How many foreclosures do you walk in where you wonder how someone lived there? The carpet is covered in pet stains, the ceilings are falling down due to water leaks in the roof, which means the roof is bad, and the foundation is cracked from one end of the house to the other because they couldn't afford to water their yard and help maintain their slab (not an issue in all markets, but we have expansive, clay soils in North Texas).
If we continue to allow people to buy houses who don't deserve to own a house, we'll never get out of the foreclosure cycle. Home ownership is a privilege, not a right. Too many people were allowed to buy homes who thought it was a right to own the American Dream at everyone else's expense. This means that they didn't care what happened to the house or to the lender who lent them the money when they stopped paying, or never started in the first place. There are many foreclosures that happen within the first few months of closing because they never made the first payment at all.
If buyers really want to own a house to make their home, they need to show lenders they can make the payments and make them on time. One of the ways to show this is the show on time payments with all other bills and credit lines, and to have money in the bank so you're not living paycheck to paycheck in case you get laid off.
Once we can stop people from buying houses who have no money, others will follow by example if they also want a part of the American Dream.
**stepping off soap box and sliding it back under the couch**