A dream deferred: the quest for the perfect loan.

Author:Robbins, John M.
Position:Executive Suite - StrategyOne Inc - Survey
 
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Is the American dream of owning a home now out of reach for all but a privileged few? If you consider a recent survey by StrategyOne, a public opinion research company, the American dream seems to be on hold for some of our fellow citizens. There are many reasons for this.

According to StrategyOne's survey, released in October, the lackluster economy, scant job formation and rigid underwriting standards make it very difficult to purchase a home today. These same sentiments were echoed in New York-based MetLife's 2010 MetLife Study of the American Dream: An Uphill Climb.

Because of the severe recession and the mindset that such a setback engenders, consumers are focusing more on financial security than on homeownership today. Collectively, they have pushed this goal farther down the list in planning for a secure financial future. Amazingly enough, a large group of people remain somewhat optimistic that the American dream is still possible to achieve. Many things will have to change, however, in order to make it a reality.

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This leads to a key question: How do we get the American economy back on track so that Americans can rebuild their financial futures? Part of the answer lies in the revitalization of the housing market. Surely, one of the key underpinnings of this country's economic health has always been homeownership and having a robust mortgage market. Essentially, if access to homeownership is not returned to a wider group of citizens soon, the hope of financial recovery for our nation becomes more difficult to achieve.

What we need now is a new underwriting strategy that involves a more concerted and focused effort to open the channels of homeownership to responsible and deserving consumers. And no, this does not mean a return to the old risk-riddled ways that started the mortgage free-fall to begin with. That solution needs to be off the table.

The first step in getting us back on the "right road" is to better understand the origin of the ultraconservative underwriting policies that now prohibit even some of the most ideal candidates from getting a loan or a refinance. And when I say ideal candidates, I mean those who have good credit, cash reserves and a stable job.

Take, for example, one present homeowner who was looking to refinance recently. She is self-employed and makes an above-average income. This candidate also has considerable equity in her home, appraised at $1 million (a rare find these days), not to...

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