Peter Buchsbaum

I was fortunate enough to have been invited to be a member of one of the most exciting groups of people helping others in our vast community. After 37 years in the Real Estate community I have found a group of likeminded people who understand it is not about a “deal” or a “loan” but rather about the assisting real people with practical solutions to today’s difficult questions.

It is not a shock to those who know me that I am terribly passionate about real estate being the engine that will drive this economy. Right Side Up is designed to simply answer questions people are sometimes too emotional to ask.

Please join us Saturday January 14^th from 12:03 to 1:37 pm at Kenny’s on Street Road for our Home Retention Workshop.

Brought to you by the RightSideUp Center. Everything at your fingertips. Realtors, lenders, lawyers, credit repair, County Assistance. That’s right all in one place. This is an opportunity to get answers to questions people have but are afraid to ask.

All of this is available to anyone who can come to 584 Middletown Blvd Langhorne, PA 19047 Wednesday December 7^th from 6:00 to 7:30. Call 215-750-3059 to Register.

Everyone has read the news about the new Government program. That’s right HARP 2. The new and improved version of the original HARP that did not meet expectations. This is a government refinancing program that has been designed to work even if your home is no longer worth what it was when you purchased it.

The biggest questions appear to be: Am I eligible? If I have been late on my mortgage am I still eligible? If my home is worth less than I owe am I still eligible?

All of these questions will be answered at the seminar.

The number of contracts for previously owned homes increased in February. That's right there was an 8.2% increase over last month but more importantly it was up 17.3% over the same period last year. While the monthly gain may be attributed to the impending end to the tax credit the year over year gain smooths out that wrinkle. Locally in the Philadelphia metropolitan area the gains were 6.85% month over month and 12.5% year over year. While I will agree with those who see a lag coming after the credit is gone (similar to the cash for clunkers) it is the possible beginning of something good. I keep hearing the chatter as to how bad it is. My suggestion is those who are promoting bad news need to watch an old movie called "Wag the Dog". Most consumers behavior is determined by how the feel and they feel good or bad based on what they see and hear each day. Sell the good news while reporting the bad news. We as an industry need to stop selling the bad news. While bad news sells newspapers it does not sell houses.

The governments' latest attempt to curtail the anticipated foreclosure crisis is eerily similar to the bail out of AIG. I was always curious why after the first $85 billion loan we so readily wrote another check to the financial institution for another $37.8 billion dollars because they "miscalculated" something. Miscalculated? That sounded more like a broken calculator. Sorry, I digress from time to time. The first Loan Modification initiative which hoped to help 3 to 4 million homeowners only helped 170,000. Again, this is not a miscalculation. This initiative did not work.

While I have never professed to have all of the answers I have proclaimed to have a lot of questions. A bank would never lend a homeowner, home builder or business a second loan because they "miscalculated". Yet, now that I own the bank, (the treasury) we are doing just that. I am not sure that the decision makers are even listening to themselves. I keep hearing that the reason the government can not keep people in their homes is because the majority of loans are held in pools owned by lots of investors (to complicated for us to understand). Hence the servicers are not in a position to make the necessary changes. Okay. If that is factual how will the new initiative work? Here is their proposal:

Principal reduction: The new initiative encourages servicers to reduce loan principal for delinquent borrowers when that is more advantageous to mortgage investors than reducing interest rates. While lowering balances would remain optional, many servicers are required by contract to do what is in the investor's best financial interest. Servicers and second-lien holders would receive financial incentives to write down principal.

Principal reduction would be available for HAMP-eligible borrowers who owe more than 115% of their home's current value. The balance would be forgiven as long as the homeowner makes timely payments for three years.

FHA refinance: Some borrowers who are current on their mortgages but have seen their property values drop could refinance into Federal Housing Administration loans worth no more than 97.75% of their home's price.

Separately, the government will double the incentive to servicers to complete a HAMP modification, to $2,000, and provide more funds to second-lien holders that release borrowers from their debt. It will also double relocation assistance to borrowers who cannot afford to stay in their homes to $3,000.

If the servicers are mechanically unable to make the changes in the first initiative how will the incentive mentioned above help? I am sure that the answer to the question is also too complicated for us to understand. Let's see where our Bailout money went.

Please do not misunderstand this post. I believe that there is a definite need to help those unemployed and those who owe more than their home is worth. I believe it is in all of our best interest to keep people in their homes. The goal is not what I am questioning but rather the execution that gets us to the desired goal. If we could possibly learn from our mistakes we would not have lent AIG a second loan and we would have pressured the banks to lend us out of the "property value crisis."

Please. To Whom It May Concern: Please look at what Pennsylvania Housing Finance has done. With a lot less money at their disposal they are helping a great number of people. $450 million was distributed to keep $43,000 people in their homes. Do that math. $75 billion should help 716,666 people stay in their homes. While that is not the goal we are being sold it is a far cry from the 170,000 they helped in the first try.

I read the second article in two weeks giving accolades to Pennsylvania for helping homeowners stay in their homes. While the jobless may not be getting much help from the President's loan modification program, those in Pennsylvanians have a place to turn.

The Pennsylvania Housing Finance Agency offers the jobless and those suffering financial hardship loans of up to $60,000 for as long as three years to cover their monthly payments or take care of their arrears. Created in 1983, the program boasts an 80% success rate in preventing foreclosures. "If you allow people some time to find a job, they can keep their home, which saves their family, their neighborhood and their communities," said Brian Hudson, the agency's executive director.

The emergency mortgage assistance program, which is funded by the state and borrowers' repayments, has come into the spotlight in recent weeks as the president searches for a way to help the unemployed stay in their homes.

The administration late last month announced a $1.5 billion initiative that gives money to the states hardest hit by the mortgage crisis: Arizona, California, Florida, Michigan and Nevada. The effort calls for the states' housing authorities to assist the jobless and those who owe more than their homes are worth.

Already, officials in Nevada, California and Florida have been in touch with Hudson to learn how to replicate Pennsylvania's program, which has distributed $450 million on behalf of 43,000 homeowners since inception. Similar efforts also exist in Delaware, North Carolina and Massachusetts.

Congratulations Mr. Hudson for all of your help.