http://news.yahoo.com/s/ap/20101008/ap_on_bi_ge/us_foreclosure_mess I wonder how the dust will settle on this one..................
Once again, the market isn't going to be allowed to clear. Denny, it's actually bad for the market because money will sit on the sidelines until the foreclosed properties come back.
A quote from the article: Banking and housing analysts, meanwhile, fear the foreclosure document problems could prolong the housing bust, and hundreds of thousands of inevitable foreclosures will be pushed off into some legal limbo for years. "If you are looking at the key in this country to economic stability, it's the housing industry," said banking analyst Nancy Bush of NAB Research. "This is a huge mess that helps nothing." And some analysts feel that uncertainty about foreclosures could make potential buyers change their mind about purchasing foreclosed properties. That's because of fears that the former owners will turn around and sue. It's really a double edged sword. It's paramount that any foreclosure is done right. On the other hand, I agree that by halting all foreclosures they will linger and then be lost down the road and we will have this surplus of cheap foreclosed homes for 10-15 years rather than 5-7 years. In turn, it keeps housing prices artificially low and promulgates more foreclosures as people hanging on waiting for an upward turn in housing prices may lose theirs unnecessarily at a later date. We're going from very ugly to substantially worse. No doubt this might continue the recession/depression for many years unnecessarily.
"And some analysts feel that uncertainty about foreclosures could make potential buyers change their mind about purchasing foreclosed properties. That's because of fears that the former owners will turn around and sue." So if people change their mind about purchaasing the foreclosures, their only choices are to not buy at all or buy something that isn't bank owned. FOR THE SHORT TERM, this is taking hundreds of thousands of homes off the market. In the long term, those houses are going to come back on the market, and probably all at once.
They just need to let supply and demand take its course on this. I read somewhere that housing supply including shadow inventory is so far out of sync with even the most optimistic demand scenarios.
Ok, I have a plan. The state correctional institutions take over all the foreclosed houses. The windows and doors are boarded up and then we incarcerate several mortgage industry workers in each house. This saves on prison costs and is more humane than shooting them all. barfo
Then you end up with thousands of half-torn down houses. Who is going to want to buy half a house? My plan is way better. barfo
Well, if you really want to get rid of houses, you do my plan of using them as jails for the mortgage brokers, and then when they are full you set fire to them. barfo
Maybe take 50% of the foreclosed houses and sell them at huge discounts to people with stable, but low paying jobs and good work histories. Designate the houses early on so they are technically off the market for the general public. hat allows low income, but steady workers to afford a home and it minimizes the numer of foreclosures available to the general public and maybe housing prices can start to increase a bit.
That is the current situation, except for the taking off the mmarket and designating part. Most foreclosures are available at huge discounts to people with stable, but low paying jobs and good work histories. At around 5% fixed/30 yrs.
I've been hearing buzz about this implying that banks don't have the proper paperwork to prove they own a home or something, meaning everyone owns their home free and clear! if true, ouch.
With plans like these, it's easy to see why things are so fucked. Also, the generally asinine amount and nature of lawyers we've got isn't all that great
