March 23, 2012

Detroit Free Press Editorial: Build more affordable rentals into housing mix

Written by:

The Detroit Free Press Editorial Board, Thurs., Mar. 22, 2012

Yesterday the Detroit Free Press editorial board weighed in on the importance of rental housing as we recover from the housing crisis. The full piece can be found online at

The recent mortgage foreclosure crisis kept U.S. housing policies centered on home ownership, even as it began to shake America’s unquestioning faith in ownership as the only suitable housing option, or a foolproof way to build wealth. Increasing numbers of poor families and elderly people cannot afford single-family homes of their own. Meanwhile, a new generation of young professionals — and older empty-nesters — want to live in dense, diverse and walkable neighborhoods, especially in urban and downtown rental markets.

 “We need a more balanced housing policy,” Shaun Donovan, director of U.S. Department of Housing and Urban Development, told the Free Press editorial board earlier this month. …

 …Before President Barack Obama took office, the U.S. had lost an estimated 350,000 of its 2 million units of subsidized housing over the previous decade. They either deteriorated or owners converted them to market-rate housing. Federal housing assistance programs serve only about one in four of eligible low-income families.

 Under Donovan, HUD has improved occupancy rates, putting more than 100,000 families into vacant public housing. HUD has also rebuilt some deteriorating housing stock, but Congress must do more to preserve it, as well as authorize HUD to use innovative public-private partnerships to raise money. Fulfilling a decades-old promise to make adequate housing a right and reality for all will take a more balanced housing policy – one that meets the needs of the growing market for affordable rentals, as well as for home ownership.

One Response to Detroit Free Press Editorial: Build more affordable rentals into housing mix

  1. Secretary Donovan,
    I have been in the mortgage business for over 25 years 10 of those years I owned my own business. I am married to an appraiser that is a NAR member.
    I am not sure where to start. I will tell you that for over 3 years I have been trying to get Washington to listen to a mortgage method that would rid the market of REO’s and would not take a dime of tax payers dollars. It has fallen on deaf ears. Like all great programs team work is needed. I was told by one congressman I would need an army. I need the NAR and HUD.
    The mortgage program is called GEM standing for Gift Equity Mortgage. Here is how it works.
    Using easy to understand numbers

    A homeowner Mr. Smith buys a home for $100,000.00 His neighbor Mr. Jones buys a similar home next door for $100,000.00 both had a mortgage on their homes.
    Mr. Smith losses his home in a foreclosure. Mr. Smith’s home did not go down in value only his ability to pay was lost. Mr. Smith’s home becomes an REO.
    Mr. Smith’s home is sold by a NAR member that list the home as a GEM for $100,000.00. A new buyer Mr. Johnson pays $100,000.00 for the new home and will be owner occupied. Mr. Johnson get a GEM mortgage for $80,000.00 with a soft second mortgage for $20,000.00 forgiven after living in the home for 3 years.

    What just took place. Mr. Jones property values where protected and the state property tax base preserved. A owner occupant not an investor bought the property with 20% equity through a soft second forgiven in 3 years. The REO owner lessens his lost from current 50 cents on the dollar to only 20 cents on the dollar. With the REO inventory reduced New Construction will pick up. The new home owner’s goes out and spends $6-8,000.00 on new items for his new home and manufacturing is stimulated.

    I have meet with several front line people from both sides of the political aisle. I have been told to dumb it down so many times. I was told to put it on a 8,1/2 X 11 with pictures so a second grader could understand it.

    What does this program need?
    1)GSE Government sponsored enterprise Fannie Mae, Freddie Mac, Ginni Mae approval so the mortgage can be made to the consumer buying a home and the end product mortgage sold on the secondary market to Fannie Mae, Freddie Mac or Ginni Mae.
    2) NAR’s help in promoting through Agents, MLS and Advertizing.

    The housing market needs the GEM program.

    Thank you,
    Kathy Maxey
    NMLS 137703

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