More often than not in life we react to problems as they arise rather than looking ahead and seeing them before they arrive. The economic boom time we are in the midst of—insert sarcasm here—is largely the result of the lack of forethought given to the potential negative repercussions of handing out home loans like candy.
Anticipating problems in the future can go a long way towards shortening downtime attributed to any given issue. With the way lenders are now holding onto their money as if approving a loan broke a commandment, an individual with a foreclosure on their credit report will have nary a chance of getting another home loan unless properly prepared.
That’s where things get difficult. Despite the best efforts of planners and developers advocating for rental housing on Long Island, not much has been built. Let’s face it: Long Island is the home of homeownership. Only about 17 percent of the region’s housing stock is of the rental variety. Chances are if you are older than 30 and looking for a place to live here, you are looking to buy a house.
If you are among the growing numbers who have walked away from a home due to finances or simply because its value plummeted well below what is owed, barring a short sale, foreclosure was inevitable. And unless one is planning to move off Long Island or nab one of the few apartments available, buying another home is not in the cards. Now I know I may be a bit crazy, but rumor has it that lending institutions, like banks, are none too fond of seeing a foreclosure on a credit report and may be loathe to entertain a mortgage application.
The Long Island Housing Partnership (LIHP), well aware of the fallout resulting from the region’s wave of foreclosures, is anticipating the numbers of foreclosure refugees and is preparing a financial fitness program aimed to help them become future buyers once again.
“The aim is to help affected homebuyers answer the question, ‘After a foreclosure, how do you get your credit back?’” notes Peter Elkowitz, LIHP president. “Eventually, you will have to apply for credit to buy a home.”
The program is still in the planning stages and a launch is scheduled for the end of the year. The hope is to give those who have suffered a foreclosure the framework necessary to again purchase a home.
Elkowitz indicated the program will feature requirements one has to follow to recover from a foreclosure or any financial disaster for that matter. Obviously, tasks that will be stressed are establishing and sticking to a budget, paying bills on time and saving.
It is hoped this credit rehabilitation boot camp will shorten the timeframe for those seeking to reenter the housing market and spur lending institutions to react favorably to the proactive approach being taken by potential buyers in lieu of past discrepancies. Ripple effects that will hopefully reinvigorate the region’s overall economy.