Lenders would provide access to low-cost checking and savings accounts and, upon a borrower’s successful participation in the program, agree to offer a mortgage and a mortgage insurer would agree to provide insurance.
Preparing first-time homebuyers with the tools to succeed as homeowners requires an investment. But, as the recent economic downturn has too clearly shown, that cost pales when compared to the tremendous social costs associated with putting people into homes they cannot afford with payments they cannot sustain.
Our economy cannot wait for 7 to 10 years on the hope that underwater borrowers will rehabilitate themselves. For a housing market recovery to be self-sustained, there must be a supply of capable, creditworthy borrowers. The Home Ready Buyers program can establish an infrastructure so borrowers and lenders can be responsible and succeed.
Mark Goldhaber runs Goldhaber Policy Services. He worked in the Department of Housing and Urban Development during the Reagan administration and later at Freddie Mac and GE Mortgage Insurance, the precursor of Genworth Mortgage Insurance. James Bennison was most recently the head of capital markets and policy development for Genworth's U.S. mortgage insurance business and has over 20 years’ experience in capital markets and structured finance, including at ING and SunTrust.