Value to foreclosures in PWC?

Davon Gray
Published: July 27, 2008

One of the sweetest and most refreshing drinks in the world is a cold glass of lemonade. How ironic it is that it comes from the sourest fruit available — the lemon. It’s where we get the phrase make \
lemonade out of lemons. In my opinion, that phrase should always inspire our thinking. By nature, I am an eternal optimist and believe that any situation can be made for good.  So when I heard about the
foreclosure epidemic, I began to wonder what could become a lemonade experience out of it.

Then it struck me. Now is a great time to fill a lot of the houses that have already been foreclosed to target populations that so desperately and so deservingly need attention. I am referring to those public
servants who live in our communities. Folks such as teachers, firefighters and police officers. Now would be a great time to target foreclosed housing for these groups.

The idea would work like this:  a house that has been foreclosed and has been on the market for a considerable time is costing the banks money. Obviously they would like to sell it. And, considering that
it is foreclosed, they would want to sell the house to someone who will most likely not foreclose again. The property could be offered at the foreclosed rate, while hopefully lowering the interest rate as
well, for people designated as a teacher, firefighter or police officer.

Obviously a person would have to qualify in regards to credit, but at least the program could negate the down payment and maybe lower the interest rate or the closing costs. Such a program would allow
the banks to not have to eat the costs of unsold foreclosures and allow the most valuable of our communities to not be priced out of the housing market and to obtain a piece of the American Dream.

This could be ideal for a place like Prince William County. Back in May, I read an article that said Prince William County had the highest rate of foreclosures in Virginia, totaling an estimated 5,500
homes. That is astounding when you think about it.

Also, I found out the Prince William County Board of Supervisors had recently looked at a similar program, concentrating on ways to offer county workers lower interest rates. I have not heard the status of
their efforts, but hopefully they will get something done because the idea makes sense.

But one thing is for sure, Congress needs to be involved in any effort. I would rather see Congress invest in homes for teachers, firefighters and police officers than just another bailout for Fannie and
Freddie Mac. Or if nothing else, make this a part of any bailout.

Bailing out a major industry, this time the housing industry and last time the savings and loan industry, only solves the immediate need but seldom handles the long term problems of personal and
corporate greed. Loopholes are often created for the industry being reformed, and those who created the crisis find a way around the reforms. 

Congress is considering a housing bill to provide $300 billion in loan guarantees to help at- risk borrowers refinance into a more viable mortgage aimed at folks who might have had adjustable rate
mortgage. 

That might be a good idea, but what about those houses already in foreclosure — the ones that are bringing down property values and are targets for crime in neighborhoods?

If Congress, state government and local governments will commit to this effort, foreclosure and the need for affordable housing for public servants could become that sweet glass of lemonade made from
this bucket of lemons called the mortgage crisis.

It’s an idea that costs you and me less and certainly would provide our communities a valuable commodity — more public servants. If anyone cares to respond, I would be interested in what you think
about this.

Davon Gray works in Washington, D.C., and resides in Woodbridge. Contact him at .