It is great to see the New York Times finally coming on board as they are recognizing that Obama’s Making Home Affordable plan has been an abject failure. If fact, they even went so far as to show how it is making the housing market worse.
It is not rocket science. We need to feel the full pain of the marketplace before the market can correct itself. The governmental interference is just prolonging the agony.
As a result, desperate homeowners have sent payments to banks in often-futile efforts to keep their homes, which some see as wasting dollars they could have saved in preparation for moving to cheaper rental residences. Some borrowers have seen their credit tarnished while falsely assuming that loan modifications involved no negative reports to credit agencies.
Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.
“The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis,” said Kevin Katari, managing member of Watershed Asset Management, a San Francisco-based hedge fund. “We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway.” via the NYTimes
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I have an idea. How about making the short sale process much easier. Give the home owner the incentive to sell short if they are 2 or months months late on their mortgage. Instead of attempting a very time consuming loan mod, or going through the foreclosure process the home owner can be given a little cash as an incentive to actively market and sell their home.
I agree, but not just on the mortgage issue. Reagan said it best, Government is not the answer." Obama says " Government is the only answer." If Goverment would just step back and get out of the way, this would get worked out much quicker. Everything has a cycle, it should be left for the market to correct, not the government.
Good thing you have done here, Thanks!
Simon Salloom LA Times: Southern California home prices and sales improve in November
Southern California's real estate industry, decimated by the mortgage meltdown and housing bust, is stirring to life again — even making hiring plans — as home prices bounce back.
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I like this post!
Simon Salloom LA Times: Sales of existing homes soar 7.4% in U.S.
This is a pretty up beat article about home sales that I am quoted in. We need more positive news these days.
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Rich, Obama has never said that “government is the only answer” so please do not quote him as if he had said that.
-Tyler
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