Tuesday, February 26, 2008

Thanks for the help, but we're good to go

Shocking as it may seem foreclosures have soared yet again in January. No news there. The news is that the bailout plans aren't doing jack. Well news to the clueless MSM anyway.

Attempts to help struggling home owners have fallen short. "The loan workout modification programs aren't having a significant material effect on keeping properties from going back to the banks," Sharga said. One dramatic trend last month was a 90 percent spike in the number of properties that were repossessed by banks, compared to January 2007. "It suggests that there's little or no equity in a lot of these homes, because they're not even being sold to investors at auctions, and it suggests a continuing weakness in a lot of markets in terms of real estate sales," Sharga said.

Love that 'it suggests'. Gee ya think? How could that be I wonder. When idiots bought houses with $0 down and/or got negative loans that add principle every month or interest only loans there is no equity built up. And as soon as the values fall even a little bit there is absolutely no incentive for the idots to continue making payments. A trashed credit report is better than making 30 years worth of payments on a depreciating asset. And since most of the idiots already had a trashed credit report there is no downside.

This is what the "experts" don't get, or at least refuse to aknowledge. Most people facing foreclosure don't want help. They have no skin in the game. "Help" only means they will be stuck in their home for a long time. Sending the keys to the banks is a hell of a lot easier and they get a fresh start. Unless the government just outright buys and gives them a free home (and with Obama in the WH anything is possible), none of these schemes will avoid the tsunami of foreclosures taking place.

3 comments:

Anonymous said...

Ah yes but the idiots are still idiots. Many won't realize that it is idiotic to pay for a depreciating asset.

Anonymous said...

Easy come, easy go.

Anonymous said...

Are they really idiots? Put no money down. Pay a low mortgage for 2 years. Live in a mcmansion for the price of a 2 bedroom apartment. Borrow against the house to buy cars and exotic trips. Then walk away without paying back a cent. And on top of it get the sympathy of the media and politcians.

Compare that to the smart people who played by the rules, lived within their means and will end up bailing the deadbeats out.

Not so smart after all.