Mortgage Meltdown: 12 million homes “under water”

TIME TO WAKE UP. EVEN IF YOU ARE NOT IN DEFAULT THE MORTGAGE MELTDOWN IS GOING TO HURT YOU UNLESS YOU ACT NOW. GET INVOLVED! THERE IS NO “MIDDLE GROUND”

Most projections put the number at over 20 million homes, which means that over 95% of the people negatively impacted by the mortgage meltdown either didn’t purchase or refinance their homes or if they did are not in default and think this situation will pass them by — after all “I’M NOT BEHIND IN MY PAYMENTS. I’M FINE!” No you are not!!! 

If this mess is not cleared up by aggressive government intervention you will permanently lose equity in your house, see your real estate taxes soar, and watch as inflation eats up that comfortable margin you think you have in income. 

Bernanke is no give-away liberal. He wants this because it is absolutely necessary and at that only a partial step. 

Write your congressmen and senators. We cannot afford stick our heads in the sand on this one on some ideological grounds protecting taxpayer bailouts or whatever. It doesn’t matter whether or not the mortgage meltdown started with borrowers being stupid or Wall Street being greedy. It happened. And now it’s a train wreck headed your way.

 

Anatomy of a Fight

Over Mortgage Bill

 

By JOSEPH SCHUMAN

THE WALL STREET JOURNAL ONLINE

 

A surge of partisanship has placed in jeopardy a bill aimed at helping homeowners who are at risk of foreclosure. But the political resonance of the issue could prompt the measure’s Republican critics and Democratic backers to find middle ground.

 

The bill would try to lower risks for both the lender and the borrower, by offering government-backed insurance to lenders willing to reduce the principal for loans made to some people who owe more on the property than the home is now worth. It passed through the House Financial Services Committee with 10 Republicans joining Chairman Barney Frank and the panel’s other Democrats. But after President Bush yesterday came out and threatened to veto the bill, Republicans threw up legislative roadblocks to keep the measure from the House floor, as the New York Times reports. Mr. Bush says the bill would “reward speculators and lenders” without making a big dent in the country’s mortgage and housing-market crisis. Moreover, Republicans argue, it means taxpayers could be stuck with bad loans newly insured by the Federal Housing Administration. But the issue is more complicated than that.

 

Wall Street Journal columnist David Wessel boils down the debate to a question of whether Washington should push the lenders to help Americans whose home values sank below the size of their mortgages “even if it may cost taxpayers some money,” with the White House saying “No!” and Mr. Frank, quietly backed by Federal Reserve Chairman Ben Bernanke, saying “Yes!” Citing research from Economy.com, Mr. Wessel puts the number of families with such “underwater” mortgages at about four million, and notes that number is predicted to reach around 12 million by early next year. While many of those families will keep paying their mortgages, “many won’t, and are at risk of losing their homes,” he says. Since “no one in Washington wants to help the ‘speculators'” who bought homes as investments, and most there agree people who bought houses they can’t afford are probably beyond aid, “the debate revolves around the ‘preventable foreclosures,'” he adds.

 

And no one, from the homeowners to the lenders to the politicians and economists like Mr. Bernanke, wants to let “preventable foreclosures” go unprevented. The bill, while crafted to exclude people who don’t need the help or wouldn’t benefit, “could allow some homeowners to get a deal they don’t deserve; that’s the unfortunate byproduct of any rescue,” Mr. Wessel notes. But the Treasury and Fed, he argues, “surrendered the let-the-market-work-it-out high ground when they agreed to risk nearly $30 billion of taxpayer money to shield Bear Stearns, its creditors and counterparties from losses.” Democratic legislators yesterday were mentioning the Bear Stearns bailout again and again.

 

The housing downturn is an economic problem with as much political resonance as gas prices, and if no relief is provided, it could be a poignant issue ahead of November’s elections. Even as Mr. Bush was threatening a veto yesterday, Keith Hennessey, director of the White House National Economic Council, was saying the differences between congressional Democrats and the administration aren’t “insurmountable,” the Journal reports, adding that this leaves the door open for an eventual deal.

5 Responses

  1. i will be there for the first seminar (13th) and pay at the door !! if youhave a chance tell pierre lou will be there. we are internet friends. lou

  2. Love, death and foreclosure

    Ex-corpsman, 84, blames ‘greed, greed, greed’ as he faces losing his home

    http://www.msnbc.msn.com/id/29198366/

    Excerpt:

    “… it is now widely accepted that mortgage brokers, like those who handled all of Vargas’ loans, often lied about borrowers’ income and other aspects of the deals.”

    “Downey, which did not respond to msnbc.com’s inquiries, last year filed dozens of lawsuits that accuse mortgage brokers, borrowers and appraisers of lying on loan applications.”

    Dan Edstrom
    dmedstrom@hotmail.com

  3. No one home: 1 in 9 housing units vacant

    By Haya El Nasser and Paul Overberg, USA TODAY

    A record 1 in 9 U.S. homes are vacant, a glut created by the housing boom and subsequent collapse.

    “The numbers are further documentation of the gravity of the housing problem,” says Nicolas Retsinas, head of Harvard University’s Joint Center for Housing Studies. “This inventory is delaying any kind of housing recovery.”

    The surge in empty houses, condominiums and apartments is creating a wave of problems for communities desperate to shore up property values and tax revenues that pay for services. Vacant homes create upkeep and safety problems that ripple through neighborhoods.

    “It has a contagion effect,” Retsinas says. “A house that is vacant is often a house that is less well kept up.”

    A construction frenzy began pushing the vacancy rate up in 2005 but empty homes sold quickly at that time.

    “This is a different problem,” says Dowell Myers, housing demographer at the University of Southern California. “It’s high now because of lack of demand. Now, vacancies we see are from units that have been empty for a period of time.”

    Census numbers show:

    • More than 14 million housing units are vacant. That number does not include an estimated 4.8 million seasonal or vacation homes, most of which are occupied part of the year. The combined vacancy rate of almost 15% is higher than during previous recessions: 11% in 1991 and 9.4% in 1984.

    • About 3% of owned homes are vacant. In normal times, “maybe 1% should be vacant,” Myers says.

    • More than 9% of homes built since 2000 are vacant compared with about 2% for older homes.

    • Homes priced at $500,000 or more are just as likely to be empty as homes that cost less than $100,000.

    Historically, vacant housing was more of a concern in cities that have poor neighborhoods. Now, it has hit suburbs and new subdivisions.

    “You have abandoned vacant housing in Detroit but you also have it in Henderson, Nev., and Mesa, Ariz. (suburbs of Las Vegas and Phoenix),” Retsinas says.

    The stimulus bill before Congress contains $2 billion to help communities buy and fix foreclosed, vacant properties.

    One place hit hard is Rialto, Calif., an inland town that boomed by offering shelter from astronomical housing prices in coastal Southern California. Property values have dropped 50% since 2007. In a 40-unit development, only four are occupied, says John Dutrey, housing program manager. Vacant homes, he says, bring “squatters, you have maintenance issues, security issues.”

    Find this article at:
    http://www.usatoday.com/money/economy/housing/2009-02-12-vacancy12_N.htm

    Dan Edstrom
    dmedstrom@hotmail.com

  4. But so much money is spent on the wars

  5. With the millions of foreclosures across America I can’t help but feel a sense of urgency because of the incredible opportunity. I use a great tool that lists all Florida real estate and foreclosures. You should check it out.

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