November 15, 2007
The Home Foreclosure Mess
The top three states in home foreclosures are California, Florida and Ohio. In California and Florida there was a spike in real estate values that attracted speculators, many of whom were flippers. The speculators who took risks and lost do not deserve much sympathy. In Ohio, however, the housing market did not show substantial price spikes. The situation is very different. Those losing their homes were cause by rising unemployment rates in their income sectors and by the false hope (lured by low teaser initial rates) that many in the lower income sectors could afford homes that were beyond their means. Should government money bail them out? Should the government force "renegotiation of rates" (should SIV trustees be prohibited from foreclosing)? The argument is more complicated. One has to balance long-term injury to the home lending market (caused by disabling execution on loan; loans with be more expensive in the future and less available to lower income earners) with short-term relief for those who are facing the lose of their homes. The moral questions are much tougher. Since the government, if empowered will probably make a mess of things, I would let the market clear on its own.
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Ohio is in a mess largely due to the federal government's mad rush to globalize the economy by destroying American manufacturing jobs.
Since this has been in play for 15 years there isn't much the government could do anyway.
The feds will likely find a way to bail out Wall Street, because they are, you know, rich people.
Ohio AG Dann says a substantial percentage of the mortgage companies committed fraud. We will see how many of them actually end up in prison - my guess, very few.
Posted by: save_the_rustbelt | Nov 19, 2007 10:28:16 AM
The foreclosure market appears to be expanding with no signs of relief. The combination of overextended sub-prime mortgage holders and an ominous economic slowdown indicate that this is a trend that is likely to continue for at least the next year. With all the negative news in the wind, should you venture into foreclosures now or wait for the bottom of the market to hit?
Posted by: John | Dec 6, 2007 1:29:15 AM
Many people think of foreclosure investors as being "bottom feeders" or parasites - taking advantage of the misfortunes of others. Others view them as being a necessary evil - or safety net that will help to adjust the market price and stabilize the real estate market. Whatever you think, someone must buy these properties. Just as "vultures" have their place in the natural ecosystem; so too foreclosure investors have a place in bringing some sanity and stability back into a real estate market that had become a feeding frenzy of over extended buyers driving ever higher prices in already over heated markets.
Posted by: John | Dec 6, 2007 1:31:54 AM
Due to the decrease in the foreclosure many people lost their homes which resulted in unemployment,decrease their income sectors and by the false hope that many in the lower income sectors could afford homes that were beyond their means.
Posted by: John | Mar 25, 2008 9:14:00 PM
It is going to take a lot more than a couple of bills to fix the foreclosure problems these days. Time will heal.
Posted by: Alan Daniels | Jul 2, 2008 1:19:56 PM
i agree only time will help. i do not seea
decline in the new future.
Posted by: wireless cell phone home business plan | Apr 3, 2009 8:30:44 PM