Too little, too late for debtors?

Whether "significant,” or a "Band-Aid” on a "huge gash,” President Bush's action Friday to help people struggling to keep their homes is something, which is better than nothing.

That was the assessment of some Oklahoma City housing and lending professionals.

The president said the Federal Housing Administration soon will launch a new program, FHA Secure, that will allow homeowners with good credit, but who can't make rising house payments, to refinance into FHA-insured loans.

The president also asked Congress to allow the FHA to insure bigger loans and reduce its down-payment requirements, and to temporarily suspend the taxation of forgiven mortgage debt.

Also, this fall the Housing and Urban Development Department will seek changes in the Real Estate Settlement Procedures Act — the federal law that governs home purchases — to help shoppers find the best loan terms.

They're all good steps, but could be too little too late for too many people, said Oklahoma City real estate broker Mary Berry, who handles foreclosures for HUD and for Countrywide and other lenders.

Oklahoma had almost 7,000 foreclosures through June, 26 percent more than in the first half of last year, she said.

"It's probably going to help, but it's like a huge gash you need to put 10 stitches on and you put a Band-Aid on it,” said Berry, broker-owner of Century 21 All Pro in south Oklahoma City.

Massive home loan defaults and price depreciation have hit regions of the country hard before, as in the oil-state bust of the 1980s, but not the nation as a whole, she said.

"It's not going to respect anyone this time, she said.

Inflated appraisals, which are at the heart of much of the housing problem, are disappearing, she said. "Finally, the appraisers are starting to take notice. They're coming in under contract prices now.”

That's here, not just in formerly overheated housing markets on the coasts, and in the middle of the market, not just the high end.

Berry said one of her agents just handled a sale in Midwest City that might be a warning: Buyer and seller had agreed on a price of $104,900, but the appraisal came in at $100,000. Rather than scrap the deal, the seller dropped the price.

As the market works through its troubles, foreclosed homes here could sell for about 75 percent of their appraised value at foreclosure, far less than the 95 percent they fetched not long ago, she said.

The effect on the market as a whole? Berry said housing here could see average depreciation of 3 or 4 percent before things turn around.

Allowing people to get out of a subprime, or delinquent loan, and into a fixed-rate FHA-insured loan will help stabilize the entire market, said David Feisal, senior vice president of Tulsa-based SpiritBank and immediate past president of the Oklahoma Mortgage Bankers Association.

Home builder Jeff Click he was encouraged to see the White House's attention.

"A sound lending industry is vital to the recovering health of the broader real estate market, and homebuyers need to be able to have confidence in their financing options, while existing homeowners need to have reasonable options to preserve their ability to remain in their home,” said Click, vice president and secretary-treasurer of the