Give readers a mortgage program scorecard

By Flickr user Robert Fairchild

Tax credits. Loan modifications. Deed-for-lease. Short-sale incentives.

It’s getting difficult to keep track of government programs aimed at propping up the frail home buying and selling markets.

And we’re paid to do so.  Imagine the confusion among shoppers and sellers facing foreclosure or ready to dip a toe into spring’s residential real estate season.

My suggestion: a graphics-driven scorecard that will route readers to available programs for which they may be eligible.   Your design staff will have better suggestions than I, but I’m picturing one of those schematics with yes/no questions and arrows that are dependent on the answers:  “Is your house worth less than the mortgage balance?  If yes, turn right. If no, skip to Part 3…” – that sort of thing.

Consider splitting the graphic into separate sections for buyers and sellers, but remember that many in the audience will be both in the same year.

With so many overlapping programs and varied agencies involved, it’s really difficult to find a ready-made round-up of programs.  Here’s a pretty good page from the National Association of Realtors, which lists a variety of initiatives funded by the American Recovery and Reinvestment Act of 2009.  The page offers links and explanatory notes on programs like Neighborhood Stabilization, the Homebuyers’ Tax Credit (which is good for properties under contract by April 30; closing need not take place until June) and various energy-related incentives.

Most recently making news, the Home Affordable Foreclosure Alternatives Program (HAFA) is the short-sale incentive program which kicks in April 5.  Readers among the 20 percent to 25 percent of homeowners who are ‘under water’ – whose houses are worth less now than the mortgage balance – will be wondering about details of this new effort which compels lenders to OK sales for lower amounts.

It’s not necessarily a win-win.  Some observers are skeptical that a couple thousand dollars in incentives will spur turnover.  And the forced short sales could speed up bank loan losses, as this MarketWatch article points out.

An appraisers trade group also has qualms, according to this press release.

Be sure your graphic includes the refinancing and loan modification alternatives available through the federal Making Home Affordable program, as well as the Fannie Mae Deed-For-Lease alternative that aims to keep foreclosed borrowers in the same homes – as renters.

And do check with local lenders and state and county housing commissions for additional options including state-sponsored down-payment assistance programs, HUD-funded programs administered by state and local agencies and other region-specific real-estate incentives.

Also, while you do want to produce an explanatory piece linking application and eligibility information, etc. etc., cast a critical eye at programs, many of which are accused of providing little in the way of actual help.  ProPublica, for example, has been watchdogging the Making Home Affordable efforts.

And talk to local experts – academics, perhaps, or those without a direct vested interest – about the long-term effect on home values, property tax revenues and bank profits of lower selling prices, lower appraisals and bank writedowns.  Don’t mislead audiences that there is an easy fix for their woes, because it’s doubtful that any government program will serve all cash-strapped homeowners.