The problem is clear, unlike the solution

[rtnsr, THANK you to the readers who contacted me regarding their own mortgage and I' refinancing applications, confirming many of the issues I shared in last month's column. I should add that I did finally get the refinance, but at a higher rate and with some additional issues that gave me great concern for how many others would nol have qualified under the same process. The appraisal came in at "X" (very close to where I had valued it, which was abott 40vo below its peak) and then a new twist was thrown at me: I now had to have a "desk appraisal" (never had to do that before), which came in 25Va less than the first appraisal-an absolutely ridiculous price with no validity. As my loan-to-value was low, I still qualified, but clearly those applying for SOVo or more LTV (the majority of buyers) would not have.

What I do not understand in this "we are not in a recession" world we live in presently is why what is clear as day is not being dealt with. You do not have to be a genius to understand that there is something drastically missing in this recovery, and that is construction. Now it is not that I had thought thatyou did not understand that, it just seems that no one else seems to, especially where it matters-in government. No industry has suffered more these past years than ours, and the pain is easy to see.

We are now in our fifth year of decline, plagued by more foreclosures and short sales than ever, and not enough buyers, leaving a high inventory of homes either on the market or in the shadow market because people just cannot sell them and are waiting hopefully for a better time. There is not one recession I can remember where housing did not lead this country out of doldrums by creating new jobs that could not be shipped overseas. I asked last month where the new jobs would come from. Well, duh! It is simple-we must clear up the housing mess. Now!

The 298,000 new homes number in July put this year and the problem into context, being the lowest number since at least 1963.It is not getting better, it is getting worse. The number of construction jobs continues to retract. In fact, instead of being around, l5-20Vo of the total market, new construction sales are running around 8%.

So I was pleased to hear that there was an initiative to get the general job market going again that would also help this industry. I anxiously waited to learn details of this "bold" new jobs bill, to hear something meaningful that would impact both your and my businesses. Sadly, I think the plan missed the point, as the President outlined a series of rehashed proposals that have been tried before with little success. There was nothing that was new and nothing that is likely to get companies hiring again in the volume this country needs. In fact, as I am typing this, I just heard on the news that Bank of America may erase 40,000 jobs. We need creative thinking and vision on how we will compete industrially in the new world. These proposals will have no real impact in the overall job market, and there is also no plan to attack the root cause of this country's weakness-housing demand.

Normally, downturns create pent-up demand that, combined with some of the lowest mortgage rates on record, should boost demand once the economy starts to improve. But now with four million delinquent on their mortgages, millions more underwater, and tight lending policies by the banks, there seems little hope to change the status quo.

The proposal barely mentioned housing, except for "government will work... to help more people refinance their mortgages," but again short on detail. Until we can find a way to clear the backlog of foreclosed properties, we cannot put a floor on shrinking home prices, keep people in their homes, invigorate consumer confidence and consumption, and at least stabilize our personal balance sheets-all elements needed to get the industry building asain.

Now, like many of you, I acted within my means, was never in over my head, made my loan payments, and in the early days strongly believed that I should not have to pay for the many others who didn't. In the last year, I have come to realize we must get past this thinking. Until we do, we cannot escape this downward spiral. We just cannot bury our heads and hope the problem vanishes. Consumer confidence continues to remain low. Until we can again feel comfortable about spending, nothing can change. Ofone thing I'm certain: we need an end to this continued uncertainty we live in today.

Alan Oakes, Publisher ajoakes@aol.com

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