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Friday, 11 July, 2008 4:13 AM

U.S. Secretary of Housing and Urban Development Steve Preston Announces Expansion of FHASecure Program

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Steve Preston at the Detroit Economic Club on July 9, 2008.

by Garrett Godwin
ggodwin82@yahoo.com

WATCH NOW:

Steve Preston: Part Two MPEG Video

Steve Preson: Question and Answer Session MPEG Video

DETROIT -- The latest Detroit Economic Club (DEC) meeting inside the MGM Grand Casino Hotel in downtown Detroit had important historical context. In 1934, Allen Crow was the founder of the DEC, which was then the Economic Club of Detroit during the middle of a prolonged housing crisis. And that was the purpose of Wednesday's meeting, spoken by Department of Housing and Urban Development (HUD) Secretary Steve Preston -- "to discuss the ways that Detroit could utilize the thinking of its business and community leaders to address housing needs".

"We want to help people stay in their homes," Preston continued. However, "one of the problems is people can buy irresponsible," as they're being put in homes with mortgages they don't understand. "People, when buying homes and signing mortgages", Preston went on, "need to know what they're getting into."

FHASecure is a program that transitions homeowners who are unable to make payments after resets into safer FHA loans. On July 14, FHASecure will be expanded to families who have missed as many as three monthly mortgage payments over 12 months or those who have experienced temporary economic hardship such as the loss of overtime pay, medical needs or any other family issues.

The market on housing is having major problems. For instance, experts are estimating 2.5 million filings for foreclosures this year, on top of 1.5 million last year -- comparing with about 650,000 filings in a average year.

"We're in the middle of the crunch," Preston responded. "Things will get worse before it gets better." According to him, this crunch could go into the first half of next year, but will improve in the second half.

Challenges like the economy being in an recession, making it even harder for others to find employment, and not to mention that gas prices going up higher at over four dollars a gallon has Michigan hit even harder -- especially the Motor City. Last year, the Detroit metro area had the largest foreclosure rate of any city in the United States. Five percent of all homes were in some stage of foreclosure -- almost five times the national average.

Though he's been secretary since last month, Preston is determined that he's up to the job. "We're all tooled to do what we possibly can in the most cost-effective way," he goes on. "These are hard-working American families who live within their means and pay their bills on time. It's a large inventory at/or with a low-buying rate. We're trying to help people that need help.

"Many of us believe that our primary focus as government leaders should be able to help people stay in their homes if they are committed to making mortgage payments, and can afford to if they have the right mortgage. Aside from the obvious benefit to the homeowner, it will also reduce additional supply in the market and financial losses for investors. The key is getting them in the right mortgage."

Rather than sit back and wait for Congress, both Preston and HUD took action on the housing/mortgage problems by getting local businesses and private ownerships involved in making this work. Even trying to get the community involved through looking for mortgage counselors. That way, houseowners can talk with the lenders on making payment arrangements to prevent being homeless. "People are upside down in mortgages," he said. "The challenge is you can't paid it, so you need to figure a way on how to pay it.

"We need to make sure that the institutions that support American home buyers are both financially sound and effective at providing good products for consumers.

"We are going to have to work in partnership at all levels of government and unite the private and not-for-profit sectors to be most effective. But I, for one, pledge to do everything we can to lessen the burden of this crisis on our fellow citizens, and lay a lasting foundation our future."

The presiding officer of the meeting was Thomas Dekar, Vice Chairman and Regional Managing Principal - North Central, Deloitte, LLP.

 


PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

About 150 Detroit Economic Club members, guests and media attended the meeting.

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Thomas Dekar, Vice Chairman of Deloitte & Touche USA LLP, was the presiding officer.

 

PHOTO BY JASON RZUCIDLO / ©AMERICAJR.com

Thomas Dekar, Steve Preson and Steve Grigorian (Detroit Economic Club Chief Operating Officer).

 

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