Are the Feds stepping in the right direction to help recovery?

I just need to get this off my chest. When Federal Reserve President Sandra Pianalto spoke at a housing conference in Washington recently, she suggested a community focused approach to the foreclosure crisis. No surprise that she pointed out that a healthy housing sector is critical to the overall economy and recovery.

Pianalto suggested immediate help for low income communities and that regulators should try to find ways to better implement the Neighborhood Stabilization Program and the Community Reinvestment Act.

While that is a fine goal, it is not the path the feds should be starting down right now. When it comes to homeownership and financing, we need to first help those that can help themselves. By this, I mean the people with jobs, some kind of financial stability, ability to repay loans and ability to pay taxes.

Way too many of those employed taxpayers can't get home loans or refinance their existing mortgages to take advantage of today's low interest rates. We need to help them with reasonable mortgage underwriting standards. This will create more homeowners. Then we can begin helping those that can’t help themselves. The money generated by helping this first group can be used to create opportunities needed in low income communities – not the other way around.

Help the homeowners who are in their homes and have been making payments regularly. That might sound a little harsh, but why not first help the homeowners who have the best chance of helping themselves out of this mess first?   [where: 75230]