The path to hell is paved with good intentions.
So is the path for fixing our real estate market issues.
On the day that RealtyTrac announced that foreclosures are at a 5 year high and that banks are sitting on a plethora of homes, we get this nugget.
About 231,000 homeowners have completed loan modifications as part of the Obama administration’s flagship foreclosure prevention program through March. That’s about 21 percent of the 1.2 million borrowers who began the program over the past year.
But another 158,000 homeowners who signed up have dropped out — either because they didn’t make payments or failed to return the necessary documents. That’s up from about 90,000 just a month earlier.
The famed “We will fix the housing and foreclosure program with your tax money” program coming out of Washington has just 231,000 families completing the program and 158,000 flunking it. And 68,000 of the families flunking it have done so in the past month.
I have said for years now, let the market take it’s beating, stop subsidizing it, and let us find a real bottom. When we do, consumers will feel comfortable buying and knowing they have a chance of appreciation.
Instead we have a government trying to forestall the pain and instead we are having even more pain over a longer period of time. The cost of human suffering is not lessening folks. Instead we are given the slow drip of handouts, bailouts, programs, and supplications from Washington, each one prolonging the misery.
Wake Up, America.
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{ 14 comments… read them below or add one }
I believe we are two years away from the bottom – maybe three.
That doesn't mean that I don't think someone in the market to buy should wait… because the interest rate in two years is likely to be much higher, based upon the destruction being foisted upon the American Dollar.
I actually met a lady that saved her home through this program. She said it was a nightmare to get through, they had to call back multiple times and fill out a mountain of paperwork. But in the end they did save their home from foreclosure.
The challenge with these programs is that most of the people who need them are not equipped to understand how to fill out the documents. A lot of times what happens is people factor expenses into their income and expense statement that don't need to be factored or they forget to account for all of their income. This throws off the ratios. There needs to be more education or at least more people using the educational resources that are available. Also I notice people are apprehensive, they feel like they are doing something wrong.
If people can't afford their payments lowering them a little won't help in most cases. We are seeing a lot of bank foreclosures in Bend Oregon. I hope you have a good year.
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If people can’t afford their payments lowering them a little won’t help in most cases. We are seeing a lot of bank foreclosures in Bend Oregon. I hope you have a good year.
If people can’t afford their payments lowering them a little won’t help in most cases. We are seeing a lot of bank foreclosures in Bend Oregon. I hope you have a good year.
I believe we are two years away from the bottom – maybe three.
That doesn't mean that I don't think someone in the market to buy should wait… because the interest rate in two years is likely to be much higher, based upon the destruction being foisted upon the American Dollar.
The challenge with these programs is that most of the people who need them are not equipped to understand how to fill out the documents. A lot of times what happens is people factor expenses into their income and expense statement that don't need to be factored or they forget to account for all of their income. This throws off the ratios. There needs to be more education or at least more people using the educational resources that are available. Also I notice people are apprehensive, they feel like they are doing something wrong.
The challenge with these programs is that most of the people who need them are not equipped to understand how to fill out the documents. A lot of times what happens is people factor expenses into their income and expense statement that don't need to be factored or they forget to account for all of their income. This throws off the ratios. There needs to be more education or at least more people using the educational resources that are available. Also I notice people are apprehensive, they feel like they are doing something wrong.
If people can’t afford their payments lowering them a little won’t help in most cases. We are seeing a lot of bank foreclosures in Bend Oregon. I hope you have a good year.
"let the market take it’s beating, stop subsidizing it, and let us find a real bottom" I completely agree and have been saying this for years. Sometimes I think our legislators skipped Econ 101. Let them foreclose and do it quickly.
Low doc easy money got us into this mess and in it you will find the way out..
Lowing the defaulting morgagee's interest rate in a low doc process as an effort of last resort. Forclosers cost the bank more principal than just lowering the customers interstest rate even if it just for the interum. Hello? What I see are a lot of people wanting to see how bad it will get so they can take advantage while it destablizes the real estate market and economy rather than a common sense approach to dealing with the issue. It lends to reason that this is a case that misery loves company.
Cheap real estate on the market looks tempting however the reality is that unless you can sell the home your in for more than you paid you can not buy the next one. Unless of course you are wanting a career in real estate investment. Stablization of the real estate market is easier than you may realize. Real estate boom and bust cycles historicly were 10 years up and 10 years down. Sustainable growth is another question that is trying to be achieved right now but experts are not certain how go about it. There are so many ideologies that are ignorant and without foundation that are going around it is a wonder it took that long to calapse due to a panic. The bottom line at the end of the day… Lower the interstest rates of the defaulting mortgages and you will lower the forclosers and find the bottom. When vacancy is absorbed prices will normalize. That is the true bottom. Dont take advice about precious gems from a camel trader!