Oh man this thing gets wackier and wackier.
First the Feds propose the SIVs which were supposed to save the credit implosion. Credit markets keep imploding.
Then Jorge W. proposes a rate freeze for home "owners". Home prices keep plummeting as do sales.
Now the latest scheme is a 30 day foreclosure freeze. Good luck with all that Jorge.
It is unreal how incompetent these people are. The patients is in cardiac arrest and the solution from these idiots is an aspirin and a side order of fries. The problem isn't foreclosures. The problem is too much debt taken on by people who cannot afford to pay the debt back. You can stop foreclosures for 300 days and on day 301 the foreclosures will begin right up again.
And have you heard some of the 'solutions' being proposed? My favorite one is when the money that home "onwers" are behind on is added on to the loan. So you are paying the same money twice. And on top of it paying back the money on a house that is worth tens if not hundreds of thousands less than the value of the loan. Who in their right mind will take such a deal instead of just walking away?
Oh and all this is happening in the background of Obama talking about the need for affordable housing. HELLO? MCFLY? Anyone home? Propping up people in overpriced homes and demanding affordable housing are mutually exclusive. Let house prices continue to fall to where they should be and presto, you have affordable housing.
And let’s assume that this or that scheme works and the home “owner” can afford his house. He won’t own his home, his home will own him. The vast majority of ARMs have adjusted by a few hundred dollars. If you are living so on the edge that a $2500 to $2900 mortgage jump causes you to go into foreclosure, why do you want that house? OK so BofA or Countrywide lowers your rate back to $2500. Is a house really worth 30 years of living on the edge like that? Is the house really worth not being able to save any money? Is the stress really worth it just so you can you are a home “owner”? You might think it is now, but I have a feeling 6 months later when you see that the same house costs $1500 to rent vs. $2500 to own, you might just change your mind too.
1 comment:
Artificially distorting the market is a big time mistake. Sometimes it feels like we are building a house of cards on top of another house of cards. Something will give sooner or later and throwing more money at it will only make it more top heavy.
There has to be some pain after major (greenspan bubble) gains. There always should be.
Post a Comment