Mopping up after the foreclosure disaster will take years of hard work and reeducation.
The lessons learned should provide Government, financial institutions and, both past and future borrowers a wealth of anecdotes to ward off future disasters - we hope.
The reintroduction of banking regulations, the imposition of more consumer protection laws and back-to-basics underwriting provide preventative measures and certainly a "Big Brother" approach to overseeing the home loan transaction of tomorrow.
Like a Security Guard, these steps will serve as a deterrent for the unscrupulous or downright deceptive participant but they stop short of addressing the realities of homeownership and the victims of financial crisis.
While the deterrents will limit certain types of loans and hopefully prevent the resurgence of toxic loans, homeowners will still face economic crises and lenders/servicers will need to better deal with this facet of loan ownership.
Taking from other industries, homeowners, industry participants and concerned advocates should unite to create a "Good Lender" Seal of Approval.
Qualifying homeowner centric services such as a Foreclosure Protection/Prevention program that (not unlike that being offered in many automobile commercials today) offer automatic remedies - Government loan or not, such as the ability to miss up to 12 payments during the life of a loan, Home Savers Advance and Deed for Lease options (currently only offered to Fannie Mae owned loans), and perhaps most importantly, foreclosure prevention specialists who actually answer the phone and provide compassionate service, etc.
The list could go on but the objective being to encourage consumers to insist upon a Lender Partner that recognizes the ravages of foreclosure and the imperfections associated with economic realities.
Job loss is and can be catastrophic for many homeowners and the average homeowner will require some form of help to recover - regardless of whether their loan is owned by Fannie Mae or Freddie Mac.
Property Investors should seek inclusion, as many provide much needed rental housing but are no less vulnerable to the economic realities that can undermine the best laid plans.
Current Government Programs - Making Home Affordable, FHA - Hope for Homeowners, do little if anything to help the investor who may have used a Government sponsored loan to purchase the investment property.
Lenders/servicers who voluntarily participate in the "Good Lender" Seal of Approval program would be entitled to wear their badge of honor like a Good Housekeeping Seal or a Web Site Security Seal of Approval.
Unsuspecting homeowners as well as those once bitten would be able to underwrite as well as be underwritten by their lender of choice.
Participating lenders would display their policy commitment along with performance records and foreclosure aversion statistics, giving homeowners an opportunity to choose wisely their dream (home) manager or lender partner.
All else being equal - price, programs, etc.
, why would a borrower go to or be referred to a non-participating lender.
If web sites and non-financial service providers are compelled to display a seal of security, it should stand to reason that a homeowner or potential homeowner should expect the same from those that will be a near lifetime partner for the biggest investment that they will ever make.
This, perhaps, would ensure that all participants in a loan transaction have knowledgeably engaged.
Just a thought.