HomeOwnership

If you already own a house, you probably have a pretty good idea about the rights, responsibilities, and financial obligations of homeownership. And if your experience as a homeowner has been a generally positive one, you might have toyed with the idea of buying a second piece of property.

Why should you consider buying a second home? Four reasons spring to mind: finances, fun, family and the future.

A handful of mega-mansions – all recently listed or sold in the U.S. for $50 million or more – carry such astronomical price tags and boast so many lavish amenities that it's hard for most people to picture themselves in these upscale properties or identify with the owners of these grand estates.

But existing and would-be property owners from all economic backgrounds can nonetheless learn some important lessons from these luxury homes and their owners, all of whom have a story to tell:

The Federal Housing Administration reform bill overwhelmingly approved in the U.S. House of Representatives last Thursday will strengthen the housing finance agency, but will likely prove to be mixed blessing for homebuyers.

The legislation, passed by a vote of 406 to 4, would raise fees for borrowers, give the FHA the power to oust lenders that are costing the agency too much money in claims, and make it easier for the FHA to protect itself from fraud-related losses. On the positive side, it will also allow borrowers to get mortgages with smaller down payments.

The primary purpose of the reform legislation – introduced by Rep. Maxine Waters (D-Calif.) – was to shore up the deteriorating finances of the FHA, an agency whose prominence in the mortgage business has skyrocketed lately.

The FHA doesn't make home loans; instead, it insures lenders against default. Less than four years ago, it was handling only 4 percent of home loan volume. Today, the agency insures roughly one-third of all new mortgages in the U.S.

What do the Indianapolis Colts and the Chicago housing market have in common?

They'll both have to wait at least another year for redemption. But bad news for Chicago's housing market - it may have to wait even longer than the Super Bowl losers.

According to John Burns Real Estate Consulting, an Irvine, Calif.-based company that focuses on home building industry decisions, Chicago-area existing-home sales will rise in 2010 and will reach 95,000 units in 2013. Though encouraging, this falls well below the watermark of 146,082 homes sold in 2005, the zenith of the housing boom.

It seems some folks are giving up on the American Dream.

A Rasmussen Reports national telephone survey finds that a mere 55% of adults say buying a home is the best investment families can make. That's down from 59% last November, 67% last May and 79% in June 2008. A similar question on a Fannie Mae's National Housing survey found that in 1996, a whopping 89% of Americans believed one was better off owning a home rather than renting.

The new skeptics include folks like Dave Guilford, a former stockbroker and small business owner who, in November 2008, sold his Mandeville, La. home for $220,000 and put his stake in a 4-bedroom Paris rental. "If it's up to me, we'll never own another home again, unless it's investment property and not our own residence," he says. "I'm perfectly content to rent for the rest of my life."

Guilford, 40, managed to scrape some equity out of the home, which he bought for $180,000 in 2003. But he thinks he would've gotten a better return if he had put the money into stocks or a retirement savings account -- especially after watching the home's value fall from its peak of $350,000.

"Owning your principal residence is perhaps the worst investment an adult can make," he says. "A lot of marketing has gone into convincing Americans that this is a good investment, when it is in fact a horrible investment for 90% of the population."

Call it Male Home Ownership Dissatisfaction Syndrome (or, MHODS, for these pharmaceutically abbreviated times).

Or maybe just a bad epidemic of Buyer's Remorse. After seeming to embrace the many "joys" of home ownership -- mowing the lawn, retreating to the finished basement to watch football, unclogging blocked toilets -- guys, it seems, are rebelling and giving up the mortgage. Or so The New York Times tells us.

Take one Alan Berks, a playwright. He owned a 3-bedroom house in a Minneapolis suburb and spent a lot of time unhappily rearranging the living room furniture. He got fed up, moved with his wife to Honduras, and then resettled in a Minneapolis rental near shops and restaurants. His conclusion about home ownership? He doesn't see it as a "moral good."

He's not alone. The Times sees a "growing cohort" of guys who are "falling out of love with the holy institution of home ownership."

Given the sub-prime fiasco, foreclosures, and record unemployment, it's not too surprising that anyone - male or female - would rethink owning a home, especially if the incentive for buying is to have an investment rather than simply a place to live, as was the case with countless home buyers during the real estate bubble.

The epic drama of Wall Street bailouts and Main Street foreclosures riveted the nation in 2009. Meanwhile, financial industry groups and Washington policy advocates have been prepping for the big story of 2010: The fight over the future of Fannie Mae and Freddie Mac -- and with them, the fate of the 30-year, fixed rate mortgage that built the American dream.

The Obama administration has said that by February, it will lay out its vision for Fannie and Freddie, which in some form have been the bedrock of home mortgage financing since 1938. For months now, industry and consumer groups have huddled over bullet points, figuring out their official positions.

On the basics, they come surprisingly close to a consensus. Bankers and consumer groups alike want to essentially sign Fannie and Freddie up as contestants on The Biggest Loser. In place of gi-normous shareholder-owned, government regulated companies on a quest for stratospheric stock prices, the feds would back mini-Fannies that would sell and guarantee mortgage-backed securities under federal regulation. That would ensure that most Americans would continue to have access to long-term mortgages at fixed interest rates, something that wouldn't likely happen if left to the private market.