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Foreclosures, Housing & Recovery

We look at real estate now, the new foreclosure scandal, and what housing means for the recovery.

Realtor Dorothy Buse stands in front of a foreclosed home in Kissimmee, Fla., Oct. 6, 2010. (AP)

Housing – real estate – was at the heart of the great bubble. It’s been – right alongside joblessness – at the heart of the great bust.

People are struggling to keep their homes, to get out from under their homes. A tidal wave of foreclosures is sweeping through shell-shocked communities. And now, scandal has hit in the foreclosure process. There are charges that giant banks broke all the rules.

Foreclosures are being frozen. It may mean a moment’s relief but a much longer road to getting real about real estate.

We dive into American housing, the whole economy, and the value of a home.

-Tom Ashbrook

Guests:

Diana Olick, real estate reporter for CNBC.

Karl Case, professor emeritus of economics at Wellesley College and co-creator, with Robert Shiller, of the Standard & Poor’s Case-Shiller housing index. Read Karl’s “Reflections on the Housing Market” in verse.

Ivy Zelman, CEO of Zelman & Associates, a consulting group which focuses on the housing industry.

Allen Sinai, founder, chief global economist and president of Decision Economics, Inc.

Please follow our community rules when engaging in comment discussion on this site.
  • jeffe

    This country is doomed, period. I just read that some recruiting agencies are not hiring anyone over 30. Are they kidding?

    We have no safety net, for those of us over 40 or 45 if we lose our jobs we are out luck. Maybe for the rest of our lives. This is not the American dream, this is the American nightmare.

    The foreclosures are just the tip of the iceberg. If you ask me this was been the largest single redistribution of wealth and capital in the history of this country and both parties have let the wealthiest 2 to 5% get away with robbing us all blind. Forget the Tea party, how about the Sucker party.

  • Ellen Dibble

    I am a subversive renter-type, light on my feet, ready to move at any opportunity. But I must say, apartment opportunities have either been of the fleece-me sort or the subsidized (unaffordable for self-employed) sort. So there’s a problem about moving. I haven’t heard about non-luxury stock going up since the 1960s, and the word is that contractors can’t construct an apartment for less than a million dollars. Hmm.
    Meanwhile, it seems a lot of Obama’s headache in re joblessness is a result of people being stuck in homes they cannot sell. If you are underwater, you stay put and drink beer. Something like that. Hopefully you can craft your own self-employment and get out from the clutches of corporate human resources people.
    If you are in a home on the edge of foreclosure, then your employment situation must be touchy. “How can I keep my job if I can’t stay put?”
    Or ” How can I find a job if I HAVE TO to stay put (in my valueless house)?”
    Why the heck doesn’t this highly mobile and changing country make it easier to let the landlords do the landlording and let us Americans again feel that quintessential “go for it” spring to our step that goes all the way back to Daniel Boone or before?

  • Brett

    My niece just walked away from her mortgaged condo after spending a year trying to sell it (she relocated to another state to take a job as a high school principal). The mortgage was “under water,” as they say, and I encouraged her to keep it as an investment and rent it out. She made an attempt for a while, but she couldn’t even get enough rent to cover the mortgage, let alone taxes, insurance…I truly feel for those folks who bought real estate after 2003. Even if they came by their mortgages properly with good credit, enough of a down payment and a 30-year fixed rate at a good percentage, they still got screwed!

  • Nick

    Yes !

    Bush Bailed out the banks otherwise the economy would collapse.

    Then the banks that our money saved now are sending us to the poor house.

    Greed…….

  • CHRIS M

    I heard this morning that the Obama administration is saying that there doesn’t need to be a moratorium on Mortgage Foreclosures due to the fraudulent practices of the major lenders. Say what????? So Mortgage companies can take advantage of folks by selling them crappy fraudulent mortgages, drag their feet to prevent those same folks from re-financing or reforming their loans, and then shove through as many foreclosures as they can based on fraudulent paperwork filed in our courts. And this is OK??? Geez, it is becoming harder & harder to support any of these clowns except for the fact that the “opposition” are even worse examples of corporate slaves.

  • Darren

    “foreclosure” has been unfairly branded as bad, due to lack of understanding and failure to except reality.

    Foreclosure is a not only crucial but necessary for a healthy housing market. When prices over shoot like what happened in the last few years. “Foreclosure” is the only means of getting the market back to normal. Foreclosure is not the cause of housing collapse, it is the consequence, the medicine to cure ridiculously high housing price that no one can comfortable afford.

    Don’t pinch your nose when you catch a cold. That is the wrong remedy and stupid.

  • http://www.nytimes.com/2010/10/11/opinion/11dehn.html?ref=opinion Yar

    The New York Times has an article on for-profit colleges and the cost of education.
    I see a similarity between education and the housing mess. The Federal Government backs nearly 80% of home mortgages, and most student debt.
    Why is it that our society invests in homes and education? It is because they are necessary for a stable democracy. I am not as worried about homes that are under-water as those that have been foreclosed and are empty. Like an abandoned education, the value of a home deteriorates rapidly if not maintained, and left to ‘moth, rust and thieves.’ The biblical reference is intentional as it can guide us in making rational decisions as a society. Currency is currently overvalued, and work is currently undervalued, that is the problem in a nutshell.

    I would put our youth on a road to mature citizenship by demanding two years of public service (CCC) and use that time to earn credit for higher education, and learn the value of work. This will put America back to work and save our democracy from collapse. We can’t save or finance our way out of debt, the only solution is through productive work. Read the NYT article on education.
    The link by my web-name should take you there.

    http://www.nytimes.com/2010/10/11/opinion/11dehn.html?ref=opinion

  • Susan

    My main concern over halting foreclosures is another increase in unemployment. Think of the large amount of people who are now employed by law firms, mortgage companies and servicing agents handling foreclosures. You could also include the drain of funds from foreclosure-related cases that go to county clerks, sheriff’s offices, abstract companies, newspapers, etc.

  • Bill

    I love the foreclosure scandal!

    The banks can’t foreclose because they were so tricky that they didn’t make sure that they or anyone even owned the house!!!!!!!
    That is one of the best stories I have ever heard! And then I heard people like Tony Blankly and perhaps Matt Miller talking in sober and hushed tones that this is serious and suggest that for the sake of the US economy and the overall housing market that homeowners (who will “eventually” lose their homes anyway) should give up their homes now. This is the best and I hope that this joke keeps playing for years. Please don’t let the homeowners “give up their homes now” it is just too much fun to watch this play out.
    My apologies to anyone directly suffering from this situation.

  • CHRIS M

    I don’t have a problem with foreclosures per se. I have a HUGE problem with Banks, once again, not following proper procedure and illegally filing improper paperwork to hasten foreclosures. They need to do it properly but, once again, they use shady methods in order to push them through rapidly. Also I hear stories all the time of these same banks delaying, stalling, and denying people the right to re-finance or modify their loans, but they can “hurry-hurry” to push through foreclosures to the point they do it improperly. No, that I cannot understand no matter what you say.

  • Steve

    The ruling classes have miscalculated.

    They were stealing to fast.

    This leads to the break down of law/contracts.

  • andrea

    I’ve been told by my mortgage company, (Wells Fargo), that they “cannot accept payments” because my home is in “active foreclosure”.

    I’ve also been applying for a loan modification for TWO YEARS. Each and every time, I am assigned a new loan processor, and I have to start the process all over again. (i.e. “Send us your paperwork and wait to hear from us.”)

    The numbers: I bought my home for 190k.

    My home is now worth LESS THAN 80k.

    I want to keep my home. So none of this hubbub makes any sense to me, and my situation.

  • MJ

    We were facing foreclosure. We’ve been paying a “modified mortgage payment” for the past 13 months waiting for our mortgage company to make a final decision on whether or not they foreclose or agree to the new payment amount. Every time we call they say, “the paperwork is still under consideration.” Why so long on a decision?

  • Marie Ugorek

    Of those homeowners who haven’t made payments in 18 months, I wonder how many of those have been trying to work with mortgage companies during that time– at a certain point in pre-foreclosure and forclosure proceedings, collections departments are forbidden from accepting payments. Intelligent homeowners bank most or all of those payments until a deal can be worked out.

    When we fell behind, we were told we had to send in a good-faith payment to get information on re-working the
    mortgage. That was January. Now, it is October and we have yet to receive even a single sheet explaining the process from our lender. Of course we aren’t going to give them more money until we get something!

  • CHRIS M

    Fraud is the correct word for filing paperwork in our COURTS that were not properly prepared. Whether a person is paying on their mortgage or not doesn’t matter. Total deflection of blame on the part of the banks!

  • Robert McLaughlin

    I wish banking fraud was prosecuted with criminal prison sentences rather than with civil monetary penalties. Individuals are knowingly committing fraud and the US taxpayer shouldn’t be subject to the threat of economic collapse because of them. Feds need to move into banking institutions and arrest those responsible.

  • Steve

    Theft by the rich leads to no respect for the law leads to chaos.

    Ultimately, the loss of freedom and the return of serfdom is an active plan by the ruling classes.

    The ruling classes, on both side of the political spectrum need to be shoved off of America’s shores and relocated to the Middle East.

    Their pawns, the professor’s and consultants, should be given the option of following their lord’s or staying and working to re-build the country.

  • K. Costello

    Tom:

    You needed a consumer advocate on the program regarding foreclosures today. There was alot of homeowner bashing without a voice to respond.

  • http://cyberfumes.blogspot.com Dave Eger

    Do the income rates include the salary’s of the drastically overpaid? If so, then it would explain why it looks iike more folks should be able to afford houses, when really it’s just that 1 guy can afford to buy 99 houses and 99 people can only afford to buy 1. As long as you put everyone in the same pool though, it looks like everyone is doing alright.

    I hope that I’m wrong though and that these experts were smart enough to see past that.

  • http://brainmindinstrev.blogspot.com Peter Melzer

    Our homes are one of the few products that are still made in America. Construction provides plenty jobs in this country. Therefore, overcoming the fallout from the housing bubble will play a crucial role in the recovery of the economy. The economy will pick up again and jobs will be created, when the distressed homes are occupied by people who can afford the mortgage payments. A moratorium would only delay the unavoidable. Structures for speedy restructuring of mortgage loans must be instituted. If our home lost half its value, we need two decades of monthly payments to recoup the loss, inflation willing (http://brainmindinstrev.blogspot.com/2009/05/immobility-calculator-negative-equity.html). If that goal is unobtainable, short sales and, as last resort, foreclosures must go forward. If we get stuck in quagmire that only postpones the inevitable, economic recovery will be ever slower.

  • Arturo

    Here we are again! Financial capitalism messed it up again! Just because the bosses did not want to hire more people to dully process foreclosures, and that happened at a time when the bosses are sitting their butts on tons of tax-payer’s money and unemployment is rampant. It seems than hiring more people cuts on their bonuses.

    Wait! They may come again begging for government help for the sake of a ‘ healthy economic recovery’. While the comedy goes on we have the Tea Party crowd chanting as an off-key chorus, yelling for small government and damning evil bureaucracies. I am still waiting to hear the Tea Party claiming for smaller banks and efficient bureaucracies.

    But they win, their banks are bigger than my government.

  • Mary Ellen, Saranac Lake

    There are TWO crucial documents to a mortgage loan: the promisorry note – the promise to pay, and the mortgage, giving the mortagee the right to foreclose if payment is not made. THE PROBLEM: a promissory note is a negotiable instrument; the bearer (holder) has the right to enforce against the maker (borrower). A major issue is that the banks can’t find the original notes. In that regard, the homeowner, if he does not defend a suit for foreclosure, could be subject to a later suit on the note. There needs to be legislation allowing or requiring the banks to indemnify the homeowner if a subsequent lawsuit is brought against the promisor.

  • Steve

    Ivy Zelman, Timothy Geitner, Lawrence Summers, Hank Paulson….

    The reckoning is coming unless…..

  • Marie Ugorek

    by the way, do NOT believe the mortgage companies’ statistics on non-responsive homeowners. My lender wrote in court documents that we were “had not responded to attempts to contact” us despite the fact that we spoke to collections weekly, and borrower counseling three times over the course of 3 months!

  • kdf

    How can anyone defend the banks? Along with social security and medicare / medicaid, this may be the biggest ponzi scheme in U.S. history. We ran to throw Madoff and others in prison, yet have bankers and members of congress whonot only seem to be doing just fine but perhaps even better.

    Just because pundits say the housing market is the bell weather doesn’t mean more informationis not needed. House purchases and mortgage payment reflect true industry and buying / paying power. We’re still building houses with no new durable industry. Why?

    And mortgage holderss who won’t return or answer calls? They’re scared. We have neighbors being thrown out, locked out, and more.

    We suffer from a lack of leadership across the board in our nation as well as a lack of willingness for the mainstream population to get properly informed, invested, and in action to say enough is enough.

  • andreabellinger

    In discussing younger buyers are you factoring in effect of huge school loans? Separate but very tied into the future. Thank you.

  • http://realestatecafe.squarespace.com RealEstateCafe

    Glad to hear that industry regulators are not just talking about a moratorium but looking more broadly for FRAUD in the foreclosure / short sales process.

    Tom, can you please ask if your expert guests if they believe that vendors should be REQUIRED to sign a zero tolerance conflict of interest policy before working on short sales and foreclosures, particularly if they involve any tax payer money?

    As a buyer agent who has never had a buyer succeed in their quest to buy a short sale or auction property, DESPITE being the high bidder, I believe that the short sale / foreclosure process is subject to insider trading and unfair business practices. So, I am very pleased this controversy has state attorneys general, regulators and the press taking a closer look at this problem.

    I’d also like to know if other potential buyers and buyer agents also believe that the short sale / foreclosure process is full of conflicts of interest. My guess is that there are enough victim stories to identify patterns that may rise to class action suits.

  • Judy

    I have a question about how college financing fits into the equation. College costs have skyrocketed. And, while houses were going up in price, the colleges expected parents to tap into the equity in their house to finance their son or daughter’s tuition. How much did this get people into trouble, and have colleges changed what they are expecting people to take out of their home equity?

  • Marie Ugorek

    the other thing that is missing from this discussion is the question of how many of these mortgages are FHA insured. I keep getting the feeling that our lender doesn’t want to work with us because if they foreclose, the TAXPAYERS pay for the entire mortgage immediately, rather than accepting a (possibly greater)profit over the long run.

    Hurry up, everyone! We have to make our profits look good this quarter! Let’s kick some responsible borrowers who have lost jobs and/or are living in an area hard hit by natural disaster out of their homes!

  • Karen

    I have a concern that no one is addressing. The banks have been supposedly cleaning up their balance sheets and there has been much concern about write-offs and distressed properties on their books. However, one of the allegations related to these fraudulent foreclosure tactics is that these banks don’t actually even know if they hold the debt (paper) anymore. If this is truly the case, how can they even be certain about the state of their balance sheets and the recovery value/impact of the assets they do foreclose on?

    How can they issue credible financial statements if this is the case?

  • Ellen Dibble

    Listening to Alan Sinai sounding mournful about housing diminishing in our GDP. But why would anyone think the housing market is preferable as a national asset for individuals to hold, preferable to investments that are actually productive, like green energy startups — I’d think economists would be shooing people’s money into business investments.
    I mean, is the government doing it for us? No.

  • Marty, Brentwood NH

    http://www.cepr.net/index.php/blogs/beat-the-press/the-nyt-wants-underwater-homeowners-to-throw-their-money-away

    Dean Baker points out that helping underwater homeowners stay in their home actually helps only the Bank, not the people, because the cannot build equity. Better to let them walk and rent more cheaply! This should be discussed more.

  • john smith

    One more government radio show drifting even more towards the noe-ccon right. Let me see if I have this corectly; regulations are passed to protect consumers from the fraudulent activities of banks, etc. We are told by media “analysts” that we could depend on banks,etc to follow the new regs and that those regs would solve the problem. Then it turns out that banks, etc, were simply falsifing there statments of compliance. Then those media spin artists tell us that that is not “really” fraud because those regs are menaingless and we shouldn’t go after those who have been breaking the law.

    How about someone who represents a consumer point of view? How about someone who understands that falsifying government documents IS fraud?

    why do you subject us to so-called guests who simply provide an incredibly tortured roadmap to explain how simple fraud and lying under oath on documents really isn’t fraud?

    Oh, by the way, don’t forget demand that we send money to NPR because this is the onlky place where we can hear this kind of junk.

  • Bob from Beverly, MA

    I’m tired of hearing from apologists from the banking industry, especially this venal and vicious woman who chooses to blame the victims for financial naivete or lying about their income. I entered the modification process at least four times. On each occasion the bank claimed that I had not supplied the correct materials, and each time I supplied exactly what was asked. I late found out that each time they closed the file and the reopened i, they received one thousand dollars of TARP money. I could go on but I’m too angry.

  • adjunct

    Yar, I’m not sure why you posted a link to the for-profit colleges, I read the article, and I have to say as one who works at one of these institutions as well if this person used their real name they will be out of a job by the end of the semester. Brave person, or someone who does not care about losing his job. Anyway everything he said was true.

    The amount of debt that these students are getting into is absurd. Try 100K of debt with no chance of getting a job that will help them pay it back. The degree these students get could be had for less than half.

    Anyway different show.

  • BHA

    Anyone who buys a house as a financial investment better understand it is a RISK. It can work out, but not necessarily. Anyone who buys a house as a financial investment in a ‘hot’ market is a fool and better have a lot of cash in the mattress. Or, as all those fools did, just bail on their commitment to pay the loan and crash the economy all over the world.

    Is a house a good ‘investment’? I can live in my house even if it never appreciates at all. I can’t live in a T-Bill or shares of stock.

  • Chris

    When we bought in 04′, our lender (ML) was heavily pushing interest-only loan that would become an ARM in 10 years even with a substantial downpayment (40%). When we balked and started asking questions, we actually got a call from the manager asking what the problem was (i.e. we weren’t being cooperative I guess) I explained that only paying the interest for 10 years and having it become an ARM (+5% cap) when our kids were just starting college wasn’t something we wanted to do. PLUS the difference between interest they wanted (5.05%) and a traditional mortgage (5.5%) sealed the deal. We were told we were making a mistake, yeah right. Knowing now what we didn’t know then, we breath a sigh of relief daily.

  • Michelle

    I’m underwater but trying to honor my mortgage with masshousing. In four years, I haven’t missed a payment but Masshousing refuses to refinance for a lower rate which would save me hundreds of dollars a month. And Masshousing is government financed! Talk about government screwing its constituency!

    Someone give me a really good reason why I shouldn’t walk away? I’ve doing everything right but the state doesn’ give a damn.

  • Ellen Dibble

    Sinai says consumers aren’t confident. Why isn’t it a “big” consumer purchase if I buy a lot of stock in windmills? It will grow the economy, produce jobs, help everyone.

  • pw

    I think Ellen Dibble’s comment (8:40 am) is worth exploring from many angles. I lived overseas for a long time, came back to the US at a time when “everybody” had a credit card. As a renter at the time with no credit history in the US, it wasn’t particularly easy to get a credit card, without which you couldn’t rent a car. Double bind! Of course I got a credit care, and then two… When I became a home owner (without a mortgage, thankfully) I found that my credit limits soared way beyond what I needed or wanted, or that reflected my income. Homeowner, in that respect, equals sucker!

    Call me a cynic, but my feeling is that this push — aided by honeyed words coming from politicians — to make everyone a homeowner is to some extent, and perhaps a large extent, about debt fueling our economy.

    That was before Americans realized that debt could also destroy our economy. In other words, a more flexible lifestyle with less debt and more renting is a very attractive alternative, but not one which is particularly attractive to Wall Street. The homeowner became the best friend of the greediest on the Street during the bubble. What I’d like to see is a far wider range of rentals and leases reflecting the wide range of tastes, climates, and needs, rentals that also provide energy efficient living spaces.

  • jeffe

    Judy I know of one couple who are facing foreclosure right now for this very reason. They borrowed against their home to pay for schools. This is a huge problem.

    Education costs are out of control, the for-profits are taking advantage of federal loans and using the same tactics that the sub-prime mortgage industry used to sell people home equity loans they did not need or could not afford to giving people who had no business getting a mortgage in the first place.

    kdf, social security and medicare / medicaid are a ponzi scheme? How so? Are you one of those people who think we should do away with all our safety nets and just let people live on garbage dumps like they do in third world countries?

  • jeffe

    I’m underwater but trying to honor my mortgage with masshousing. In four years, I haven’t missed a payment but Masshousing refuses to refinance for a lower rate which would save me hundreds of dollars a month. And Masshousing is government financed! Talk about government screwing its constituency!

    Someone give me a really good reason why I shouldn’t walk away? I’ve doing everything right but the state doesn’t give a damn.
    Posted by Michelle

    If you don’t mind your credit rating going to into the toilet for 5 years by all means walk away if this is the best option. Something does not sound right with your story however, I’m not sure why if you have a subsidized home mortgage for a first time or low income home buyer that you are in trouble. If you lost a job and are unable to keep up the payments than I can see this as an issue. If you bought at a higher rate than it’s worth now, which under Masshousing seems unlikely as the whole point of the program was to offer housing at below market rates.

  • Selene Santos

    When I realized I was going to be in financial trouble I called all of them, credit cards, car loan bank, Mortgage Company, trying to negotiate better rates so I would be in better situation. NO ONE wanted to talk to ne or do anything to help. I called Wells Fargo for 2 years and nothing. They kept saying that someone would call back but it never happened. Finally I gave up. Today I am out of the woods and they are offering me refinance from 5.50 to 3.87. I am doing because the savings is clear but I no longer need their help. Foreclosure will stop the day the banks are willing to help people who really need help and not just those who are safe bets.

  • Flowen

    Great guests, great discussion!

    Yes, a great shift in psychology coming: buy a house for living in, not for money! Thank god. One of those positive responses in the face of crisis and continued breakdown.

    A lot of deleveraging still to come. Guess who is still playing fast and loose with paperwork and tax-payer subsidized financial/housing bubbles. Another obvious corporate/government partnership extracting debt (promises to pay) and equity from the population.

    Get real! End the interest tax deduction, and all other incentives for bankers and developers to create wealth for themselves, keeping the profits, and shifting the losses to the population. The only thing free about this market is what these people take for themselves, paying themselves well while they do it!

    It should have been done two years ago: hobble these people! Make them pay for the problems they have caused while benefiting so well. If they go bye bye, good riddance! But this will never happen, because it is their government, not the people’s.

    In addition to campaign reform (the current environment is an incredible sham), making obscene amounts of money needs to be dis-incentivized. It should not be as Richard Branson says: “the first billion is hard, after that, you almost need to be irresponsible not to make the next billion.”

    We’re real good at making money and big problems; we don’t seem to be very good at much else anymore.

    Good luck to all, we’ll need it!

    Flowen

  • Ellen Dibble

    I agree, pw, that in many “homeowner” equals sucker, especially look at the amount of money that goes to the banks if one doesn’t pay in full up front. The mortgage deduction is a banking lobby coup, plain and simple. But also the lawyers and realtors make a killing each time there is a move. The object is not to have someone stay in one house for life. Oh, no, it’s better to be part of those 4 million houses that change hands each year. Better for those professions.
    But there must be a real benefit for a medium-sized city to have the kind of centralization that multi-unit housing can provide. Say there are 300 landlords whose property taxes have to be calculated and collected. Much easier for the tax collector than 3,000 individual units. Also much easier to provide water and sewage and electricity to 300 buildings than to those 3000. Also much easier to arrange bus routes, if that is in order. People are within walking distance of many things, less spread out.
    And the landlords are more tightly interwoven into the community, both the larger community, the city officers, as well as the smaller community that is their tenants. The landlords can help the police; they have rooted interests in the city that are beyond just the personal. Their investment is likely multi-generational, with cross-generational connections to plumbers, painters, electricians, all that. And for the tenants, they have a built-in community of interest, with the ability to organize for mutual protection or assistance. And if there is in truth an abundance of such housing, tenants can easily sort themselves out for compatibility. If certain neighbors are a problem, move elsewhere.
    If the landlord wants a REASONABLE profit, then this works great. If the landlord has invested simply so as to move to Hawaii and live off the checks, then it’s not so good. I am aware that it’s good to make sure the landlord does not go bankrupt or get foreclosed on. It’s a good idea to go to local churches and inquire which are the Good Citizen landlords.

  • Tom

    In 1971 the average sized home in the U.S. was 1700 sq ft. In 2008 it was 2800 sq ft. During that same 35+ years the average size family shrank by 1 person. Why did this society decide it needed more living space. A den and a living room, a dining room and breakfast nook, a game room and a family, ect. A smaller house would cost less. A high school education can tell you that.

    If you have a document in front of you that has the numbers $50,000 and $300,000 on the same sheet, or some similar disparity between two numbers and you sign that piece of paper, you made a bad decision.

    It seemed everytime a builder finished one of these oversized, overpriced houses, there was some salivating doe eyed pilgram who couldn’t wait to sit in thier new garden tub after a terrible day at the office.

    And not to mention the horrible craftsmanship that has become the building standard of today.

    I know there were some people who did the right thing when purchasing thier homes, but sadly far to many simply voluteerd to be a sucker.

  • Flowen

    I didn’t read the link, but excellent comments at 10:04 Yar!

    A lot of good posts. Best wishes to the 99%!

  • Tom

    I have noticed many comments today refering to credit cards. This has always been quite puzzling as to why so many think credit card(s) are so neccessity.

    I am 42 years old and have not owned a credit card since 1993. I have only made more than $40,000 per year once, mostly averaging around $32,000 per year and have no need for a credit card. My bank debit card will allow me to make any purchase, including renting a car.

    A massive house payment and a handful of maxed out credit cards, why America. You can’t blame Wall Street for everything.

  • Brett

    To buy a house:
    1) have a job that is very stable and likely to increase in salary
    2) get a mortgage that will only be one quarter of your monthly income
    3) get only a fixed-rate mortgage of thirty years or LESS
    4) put down at least 20%
    5) include property taxes and insurance when figuring monthly expense projections
    6) plan to stay in said job for at least ten years
    7) plan to stay in said home for at least ten years
    8) investigate and determine the cost of what comparable homes were in, say, 2001
    9) investigate and determine the cost of what comparable homes were in 2005
    10) investigate and determine the cost of what comparable homes are now
    11) make every attempt to purchase a home at under current market value
    12) purchase a home only if otherwise relatively debt free
    13) **remember, a house is a home, a place in which to live; the days of it being a good investment, that will give you a good return in a few years, are over.
    14) you are in charge of your destiny, not your lender; you decide what lender/mortgages are right for you.
    15) if your lender tells you to ignore any of the steps, go to another lender
    16) if, when you plan to sell your home, it won’t sell, either stay put and wait for the market to recover or, if you must leave, rent it out (even if you may only cover MOST of the monthly expenses involved in the cost of owning your home

    Otherwise: RENT!!!

  • Brett

    I suppose an eight with an end parenthesis just after it translates into a sunglass- wearing smiley face! Go figure…

  • Ellen Dibble

    “The American Dream” of homeownership is successful ad campaign of the American Bankers. It is their dream come true. It is time for us all to wake up.
    How can people be really aggressive job-seekers if they are tied down by their houses?
    Why isn’t Obama pointing this out? (Duh.)

  • http://www.shelterusnow.com alanscouten

    Those who cannot pay their mortgages are the criminals???
    Spare us the interviews with the foxes about chickencoop security, and instead quote our local Public Housing Director: “Let them (the poor) find their own chickencoops.” (1988)

  • Steve

    Person does not have to equal consumer the way it is defined by the US slave lords.

    Tom (11:51),
    I too have chosen to limit/eliminate credit cards but please reconsider debit cards. These cards still allow banks to siphon off wealth from you (higher rates on your purchases as merchants seek to recapture the wealth they pay to banks)

  • http://www.shelterusnow.com alanscouten

    Those who cannot pay their mortgages are the criminals???
    Spare us the interviews with the foxes about chickencoop security, and instead quote our local Public Housing Director: “Let them (the poor) find their own chickencoops.” (1988)

    “New Family Formation”? There are millions of Old Families still without affordable housing, because for the past fifty years no one has built any.

    “Why should I build five inexpensive houses, when I can build one McMansion and make ten times the profit?” (DC Builder)

  • Ellen Dibble

    I don’t see credit and/or banks as evil in and of themselves. Quite the opposite. The alternative is everybody has a rich uncle, or a family with resources to give everybody an extra boost. — which is not the American way.
    Right?
    So instead of dynasties boosting up their scions, we have what I’ll call “liquidity,” liquidity of funds, such that you can borrow for an education, borrow for a productive move, borrow for medical expenses (alas), borrow to launch a business. All that. (Or to make a fool of yourself, of course.)
    There is also liquidity of housing, which is totally undermined by too much homeownership.
    It seems in order to situate everybody in optimal jobs during an era of great job change (thanks to off-shoring, outsourcing), in order to accommodate “job liquidity,” we need “housing liquidity.”
    Okay? We need people to be able to move here or there as expeditiously and cheaply as possible. Lots of suitable rental units would accommodate such an economy, such a bounce (maybe not by November 2nd, but).
    Locking people down into mortgages and houses that involve decades of profit to their lenders, that does NOT enhance portability, the kind of mobility that allows resorting the job landscape.
    The housing constipation is contributing to the job desert. IMHO. If the banks would let go of their “need” to have people tied down in “dream-houses,” then people could go forth and be fruitful once again.

  • Craig Nielsen

    A moratorium on foreclosures will only delay and prolong the pain while making banks weaker. Remember these are people who have not made a pmt for 12 to 18 months.

  • Tom

    Steve (12:07)

    I certainly see your point and in a perfect world I would be happy paying with cash only. But where is even that possibility, I do not know.

    If banks were “here to serve” the people of its community, we would all be better off.

    Years ago, I had a good relationship with a particular banker, to the point I could write a $10,000 check to make a purchase for my furniture making shop and call him up and say, “I need you to draw me up some papers to cover a check I wrote this morning”, his reply would be “O.K., just come in in a couple of days and sign the papers”. Sadly those days are gone.

    This banking web that has been weaved, will choke and snare anybody who dares to get close enough.

  • cory

    Please define “recovery”. The definition you give will shape my response.

  • http://www.shelterusnow.com alan scouten

    Brett, this is how it really works for us in the “Middle Class”…..

    SIXTEEN POINTS

    1) No ones job is stable or likely to rise in salary
    except mine. I work for a University.
    2) $2500 per month mortgage? Yes, that is about the
    minimum mortgage payment to by any house in
    Pleasantville.
    3) Fixed Rate Mortgage? Yes, my realtor gets constant
    call from the banks requesting the names of
    “qualified buyers” in Pleasantville. (that is all
    of “us”) That is as to “them”, “Don’t call us,
    we’ll call you.” (banks)
    4) “No downpayment required, sir.”
    5) Loooow taxes here in Pleasantville….
    6) “What, you can’t find a job? Have you checked with
    a University?
    7) Why should I stay in my present home for ten years,
    when I can trade up every five years, by dumping my
    present dump?
    8) I bought my first house for $45,000 in 1975 and
    sold it for $375,000 in 2002. I LOVE Pleasantville!
    9) Comparable Homes to mine now were $750,000 in 2005,
    and still are in Pleasantville. (Only so much
    “waterfront” property you know…even here in the
    mountains.)
    10) ibid.
    11) Heh? I BUILT one at half the current builder’s Mc
    Mansion cost. (and still profited nicely, DC boys)
    12) Debt? Oh, I have plenty! Good risk and all that,
    as in “We like to loan more money to those we have
    already loans thousands to. We have a track-record
    with YOU!” (banks)
    13) It isn’t over until it’s over, and the fat-lady??..
    She is getting fatter every day, and can’t sing.
    14) National Car Rental? PICK ANY CAR IN THE LOT! Sure.
    Just try if you live in The Holler, just over the
    rise from Plesantville.
    15) “Don’t call us, we’ll call you.” (bank)
    16) Too-small to matter? No, sorry, no bailout for you
    guys. You will just have to wait-it-out. Unless
    we foreclose. Sorry about that.

    RENT? Lesson from my lifetime? (70 years)
    THERE IS A SUCKER BORN EVERY MINUTE
    or BUILD LOW….RENT HIGH
    On Point……

  • michael

    Tom asked if what the Banks did was Fraud and Ivy Zelman said “Well Legally Yes”

    It seems yet again deregulation and no little oversight allow the banks(to increase the bottom line)to cheat the system that may have to bail them out YET again.

  • Ellen Dibble

    If the banks get in trouble again, the banks will make their lending even more usurious. (I don’t envision more bailouts for them, somehow.) So how else can they survive? Fees, and slippery rates. And people like me, looking at say crashing or changing technology, or medical expenses that might mean a sudden $2,000 in deductibles bill all of a sudden, or depending on what ObamaCare does to medical insurance deductibility on taxes, might have to shell out an additional several thousand dollars in January in quarterlies to the IRS — and that would be either money I pull out of my IRA, my retirement funds, or it would be something I look to borrow shortish-term from Chase or Citi or Bank of America.
    The more trouble they have with foreclosures, the more trouble they will be needing to inflict on me. It goes round and round. If the banks don’t inflict it, the government bails the banks, and if the government is smart, they get interest for this action, and the banks eventually pass that interest they pay to the government along to us as well.
    Like I’ve been saying, those with stocks in those very banks are likely to do well, with compounding emoluments. Those who are on the other side of this equation will feel like Hercules holding the earth on his shoulders, living on home-grown beans and pumpkins, mending their sores by letting the dog like them. It isn’t very democratic, but it could be, if it were regulated properly.

  • Brett

    Thanks for the link, alan scouten. Assuming one has his own land, already has his well and septic, and electric hook up, what would the average cost be of one of your houses? The photos of the houses on the website look to be around 2,000 sq.ft or less (which is all any family should need). Have you ever considered building (or do you ever build) a group of multi-family units?

  • Alex

    A market of real estate financing may not exist without foreclosure. A freeze on foreclosures will lead to the freeze on lending. And something like that will be devastating to the housing market.

  • jeffe

    Brett you must know that building on land is very expensive. It can cost over 10K for a septic tank instillation and drilling for a well is also not cheap.
    Getting hooked up to the electrical grid in rural areas can be about 10K as well. This is not an alternative unless as you say all this infrastructure exists.

    Bottom line we need more good fair rental housing. This has always been a problem here. Rent control only made landlords worse in so far as keeping up the properties.

    If you make 50K a year that’s about $2800 a month after taxes depending where you live. That does not give one much for rent utilities and food. Here in Boston you could not survive on your own with salary without sharing an apartment or having a two income family.

  • Nick

    The latest housing foreclosure-bank/mortgage fraud is about financial greed.

    Asking an upper-middle class real estate consultant for insight is like asking a banker to explain what it must be like to live in poverty.

    If borrowers have “lied” about their incomes, then it’s fair game, frankly: the banking industry have lied + lied + lied to the American people + Congress.

  • Nestor

    We made an offer on a short sale and have been waiting nearly 9 months for a response from the owner’s bank. We even put a sizeable deposit in escrow towards this purchase. We know the owner. They are bankrupt, went through a divorce and want to walk away from the house. In fact they are not living in the house. They have not paid the mortgage in over 2 years but the bank will not give any of us information about the short sale. How does the moratorium on foreclosures affect the millions of short sales out there?

  • Susan Harrison

    Could we apply some common sense to this problem. We have not reached the bottom of house prices, and until we are at 2000-2001 prices, we won’t even be close. The houses are not worth the mortgages, and they will not be for many years, if ever. At zero interest, maybe you can afford the payments on the current, slightly-lower prices, but imagine trying to sell it 5 years from now, when the interest rate is higher, which it will have to be. Imagine the even a 7% interest rate, never mind the 12, 13 or 14 percent that was not that uncommon not that long ago. Who is going to buy the houses bought over the last couple of years, with the tax credit???

    We need to stop this now. As a former real estate appraiser, I know that the banks had power over the prices going up, and beyond anything reasonable. Chalk this one up to greed, and clean it up. The investors/banks need to eat the loss.

  • jane

    Why not use TARP 2, if that is what is needed to purchase the delinquent mortgages at a deep discount from the banks? We had no trouble doing this with foreign debt (think, Brady Bonds). The banks have no problem selling credit card and other delinquent debt to third-party debt collectors at 5% to 10% of face value.

    If the delinquent mortgages were purchased by the USG, the new Consumer Finance Agency could then work with the borrower-residents to modify the loans, including back-ending a substantial amount of negative equity. The negative equity would be payable upon death of the resident homeowner, or upon sale of the property.

  • http://www.nhsnyc.org Bernell Grier

    Neighborhood Housing Services of New York City, Inc. has been providing products and services for New York City neighborhoods and hojmeowners for nearly thirty years. We have seen cycles come and go, and this one is perhaps the worst. We find however that New York continues to be different from many other geographies. Although the City sees increasing foreclosure rates, we also have experienced many families purchasing homes in this market The American Dream of homeownership is not dead. What we see are purchasers interested in buying but looking for the best deal. In addition, persons are signing up for NHS’s education and counseling programs. We notice that we are attracting households with better credit scores. There is also more choice for families, so families are choosing to live in neighborhoods that in the past may not have been available during the rising market.

    I am listening about the down payment question on your station. In NY there is the HomeFirst program for households at 80% of area median income. NHS administers this program and we are approving DPCC assistance at a greater amount than we have in years past This program started in 2004.

    NHS is having a fundraiser on October 18th at the American Airlines Theatre. Funds will help us to help New Yorkers buy, maintain and keep their homes. For more information visit http://www.nhsnyc.org.

    Bernell Grier
    CEO

  • Jay Tillotson

    So Ivy Zelman blames the consumer for false financial statements, unrealistic dreams and greed for this crisis. If the consumer had done this a few thousand or maybe just a hundred thousand times I could cut the banks some slack and say that their were people out there who scammed the system. But the reality of the situation which Ivy Zelman and the other apologists for the mortgage business refuse to acknowledge is that this happened maybe millions of times and it was due to the lack of due diligence on the part of the officers and managers of the banking, financial industry. They are responsible for relaxing the standards for borrowing because all they could see was more bonus money for themselves as they streamlined the
    system not to help the borrower which they are claiming but to enable themselves to get a bigger bonus. The bankers and Zelman have to be congratulated for sticking to a fictitious story. They will pay no penalty for their greed because congress will stick the electorate with the bill.

  • landless

    If a renter doesn’t pay the rent, they are out in thirty days. Home owners get too many advantages compared to renters. Rentals are still too expensive; that is why people cannot save for a down paymentT. Renters are treated badly by land owners and have often to live in dangerous areas. The country has over-invested in real estate. Let it crash.

  • Ben

    I know it’s pretty grim right now for alot of folks, but imagine how people in the Great Depression felt! This isn’t even half as bad or desperate. Things will be hard for a while going forward, but it will not always be like this. They may even get worse before they better. But, you don’t have to be an optomist to be fairly certain that things WILL get better eventually.

    I know at least a few people who are nearly 50 who spent a decade or more out of the job market, and in the last couple of years have completely turned their luck around. It can happen for you too. Don’t dispair, and remember, you’re best chance of success is to follow your passion.

  • BrettG

    The lady from Zelman has not been well-briefed.

    The AGs are investigating false and/or fraudulent affidavits & false notarizations. The signing officer – if he/she did not personally review the file & all original paperwork = false affidavit- a criminal offense in most, if not all, states. If the notaries did not issue proper oaths, make proper journal entries, etc., they become subject to state forfeiture of license as well as civil & criminal penalties – going back for a number of year. In NY state it’s a minimum of 7 years of liability.

    Also, because of the MERS transfer entity & the large number of cases, it is possible for the State AGs, some homeowners & maybe DOJ have enough of a pattern to invoke civil & criminal RICO against MERS & the banks & services. The MERS website reportedly has a form for their commercial users to “create” the needed paperwork for foreclosure. Note that well. They’re offering the servicers a chance NOT to re-create the chain of possession – but to make up a chain of possession. That alone may have the AGs investigating those affidavits for falseness and/or fraud.

    Also, the purchasing entities are reportedly REMIC trusts & the entities could find themselves vulnerable to DOJ prosecution for lying to the US Government.

    Just some possibiities.

  • realityagent

    I have been a realtor for 20 years and have never seen
    the housing market this bad. The real situation on the ground and in the front lines is that sales have fallen off a cliff ever since homebuyer tax credit went away.

    Now with this foreclosure freeze, and title insurance compnies not willing to inusure disttresed houses, sales will drop by another 50%,( 25% from short sale, and 25% from foreclosures).

    As if the above where not bad enough, With 18% U6 real unmemployment, Home prices is guaranteed to fall by at least 15% to 25% throughout the country.

  • Stan

    Too bad they didn’t include Bruce Marks of NACA too balance out the panel. NPR is fast becoming the tool of corporate interests. I’m surprised they didn’t have the US Chamber of Commerce on the panel.

  • responsiblehomeowner

    The honest, responsible citizens and the innocent future generations are being cheated by two sides.

    First you have the fradulent banks buying up republicans and democrats to steal from the country through bailouts and big fat bonuses.

    Second , but not least, you have fradulent home DEBTORS and Bruce Marks of NACA who want free homes for the irresponsible and liars, who are living rent free at the taxpayers expense.

    Just because bad bankers got bailed out, which is wrong, doesn’t mean freeloaders should be able to
    take advantage of tax payers too by getting principle reduction and squatting. We should spend our energy
    getting our money back from big banks and not bailing out those who don’t pay their mortgages. News flash in order to own something , you have the pay for it.
    These defaulters, freeloaders, deadbeats do not deserve to be called home owners.

    Both, the bad bankers and the bad freeloaders are at fault and need to be punished. More sympathy should be given to renters, savers and the honest real home owners who are paying their mortages. They are the real victims of this whole debacle. Don’t forget the poor kids who will eventually need a place to buy a place to raise a family when they grow up? Are they supposed to subsidize the criminal bankers and deadbeats of this generation?

  • Brett

    jeffe,
    First, where I live, well and septic can cost about 15 grand. Of course, you left out the cost of having someone grade a driveway (sarcasm). Many of my friends have built homes, so I am well aware of the costs associated with building in my area, but thank you. You see, I wasn’t really asking Mr. scouten (or you) how I could build a house as a living solution for myself. He, however, was offering what he believes is some kind of better solution in general (although it’s hard to tell what his point really was considering his snarkiness). His homes (he’s an architect and what appears to be possibly a contractor/ some kind of self-styled quasi-mini developer; although, I could be wrong, he may just be an architect offering designs) do seem to be well built and well designed, but I was just asking HIM (not you) what his houses cost to build out of curiosity irrespective of the the other costs associated with building on one’s own land. His construction designs do seem interesting, though, and I was asking HIM (not you) about his houses, as I have a friend thinking of building. I do own land but have no intention of building on it (I already have a home). I’ll either sell the land before I die or I will will it to someone after I die.

    As to how much net pay is on fifty to sixty grand, I am also well aware of how much that is, but thank you. I have also owned a few houses in the last twenty years and have made handsome profits on the ones I’ve sold. (One I bought in 2001 tripled in value by the time I sold it in early 2005, something that just shouldn’t be in the scheme of things). I saw the bubble bursting in real estate before it actually pulled the country down into the vortex we experience now, luckily.

    As to renting, affordable rental housing has been a growing problem for the last twenty years. Builders aren’t given any incentive to build innovative rental properties that are well planned as an integral part of a well planned community. It is also not a good proposition for someone to buy a house with the intention of using it as an investment and renting it out (rent often does not cover the cost of the mortgage, taxes, insurance and maintenance). Many rental properties in urban areas have turned condo, which has been a problem in cities; this has reduced the number of affordable housing prospects in cities.

    My original point has to do with being an educated and responsible consumer. In as much as banks preyed on naive people to help create the problems we now face, many homeowners at the time (early 2000′s) who did not observe some basic rules of home ownership and what was (and still is) the proposition of buying a house, also contributed to the problem, e.g., people making ten dollars an hour were seeking mortgages for two hundred thousand (and more) dollars, People were getting ARM loans with no indication their salaries were going to go up in a few years, etc. Those people were irresponsible; if one is going to commit to owning a home, one should educate oneself as to what that proposition really means and what it really takes to pursue such a commitment.

    Banks were derelict in their duties in fully vetting prospective buyers; those seeking homeownership were also derelict in learning what their responsibilities would be.

    As to solutions…if one can buy a house, one needs to think about ALL that is involved in what that means, including how having a career might now require one to move frequently. Otherwise DON’T BUY. Communities need to offer decent, affordable rental housing. The government needs to provide tax incentives to help develop decent, affordable rental housing. Banks need to find ways to lend money to people with good ideas and solutions to housing problems (something they don’t seem to be doing).

  • Nick

    I loved how the Banks’ lacky, Amy Zelman, blamed everything on the mortagees including “Those that lied on their application.” As if the banks are the victims here. Maybe she forgot how the Bush administration bailed the banks out for their folly – toxic assets.

    Amy, if the banks are victims here, how did they acquire so many toxic assets? Someone asleep at the wheel or just whoring for money?

    Maybe if the banks and mortgagers didn’t turn around and sell each mortgage the day after they approved, they might know what they have.

    I have been a Board of Health/sanitary engineer/inspector for more than 20 years and this is the second large buiding crash I have witnessed. Both times, including the early 1990s, it was because the BANKS lent to anyone and everyone who walked in the door. Mortagers get paid for each mortgage they get so scrutinizing mortgagee’s applications was last on the list.

    Banks, Bankers, and their mouthpieces are whores just like Washington DC.

  • pw

    We’ve tended to look to “economies of size” for solutions to our growing greed without taking our needs into account. Larger may seem more efficient but it’s not efficient for the consumer — it turns out to be just another way of minimizing the power of the consumer.

    The local guy you deal with at the bank in a small town here in west Texas is the same guy you volunteer with at the food pantry and/or the same guy you sit next to in church or at the county fair parade. Your relationships are civil and sensible; you know who you’re dealing with and you don’t cheat or belittle them. When you look for service, it’s not doled out to you or withheld altogether by someone who’s name you don’t know in India or the Dominican Republic.

    Economies of size are only good for those with the biggest share of the economy and the smallest respect for the community’s shared destiny! Even many large cities have neighborhoods that develop the qualities of small towns and villages. One can always “live large,” but I’d rather get a life!

  • Deborah B Davis

    17 October 2010

    You know there are some serious federal crimes being committed within banks against the consumer concerning foreclosures. I know because I’ve lived it; have the documents to prove it and the authorities, such as the US Attorney General, Attorney General’s in three states that I know of and the FBI won’t do a thing about this.

    Sure you can read about how these authorities are, “cracking down” on banks and mortgage companies but interestingly they aren’t telling the American public the truth about the federal crimes these banks are committing in order to foreclose. And, they aren’t just attacking the low income and middle class. Here’s the truth.

    This is what I know about KeyBank for which I have written proof.

    1) If you have a loan with them, they interfere with the closing of escrow on your home when you sell it… in other words they purposely destroy your sale so they can renew your loan, adding more interest with the renewal. They did this to me three times.

    2) They forge your signature and take funds out of your account.

    3) They misappropriate your monthly payments made on your loan to a phantom account, stop sending you your account statements and then call you in default when your not. (It will take you six years or more in the legal system just to retain your account statements proving you made your payments.) By this time you’ve lost your home to KeyBank. My property was worth three million dollars and had one and a half million dollars of equity in it. And, it sold three times for well over two million dollars, ( before the property appreciated to three million dollars) while the bank refused to allow me to take these offers.

    4) If your home is owned by a trust, which mine was, KeyBank will hire an outside law firm to find a way to foreclose on your property fast. It takes three years to foreclose if your property is owned by a trust,( Judicial Foreclosure) so they take it out of the trust, (on paper only) and foreclose in a matter of months, (Non-judicial Foreclosure). Why? Because they don’t want a Judge to see what their doing.

    5) I was actually paid up on my loan a year in advance but because of KeyBank’s federal crimes I lost my home anyway. I fought them for eight years.

    6) And, when you first see these problems occurring you can write all thirty-seven KeyBank board of directors asking them to do something. They’ll ignore you.

    All tolled through this I lost close to ten million dollars; my credit is destroyed unlawfully. Because of my outrageously destroyed credit I can’t get employment. And, KeyBank left me penniless.

    You cannot convince me that this was an isolated case when KeyBank had six hundred lawsuits filed against them in Idaho alone in the early 2000s.

    But this is hidden from the public. In fact through my research I’ve found KeyBank to be the most insidious banks in business today. They hide everything including the fact that they are present in every state in this country. Where there isn’t one of their banks they’re present as a real estate company. Gee, I wonder why?

    If you have any dealings with KeyBank run, don’t walk away from them.

    Additionally you can’t convince me that KeyBank is the only bank in this country committing crimes such as I’ve described. They just know how to keep the facts out of court better than most.

    And, we want to know what’s wrong with the economy?

  • T.Smith

    It seems pretty strait forward to me. When you sign a mortage contract you agree to pay to the best of your ability, but you also agree that should circumstances arise making it impossible for you to pay there will be consequences. If you don’t pay you have in no way broken any laws. If your bank on the other hand brings fraudulent documents to court in an attempt to foreclose on you, that is breaking the law and there should be consequences for that.

  • j.gould

    I can’t believe that karl case professor said houses are affordable now! what planet, does he live in?
    He has been overly optimistic about housing for while now. Be careful of his forecast. He must know that his own index will show another drop in house prices, why doesnt he share that info? People , do your own research and educate yourselves.

    I dont care what location you are talking about,
    Lenders are super tight, unemployment is at an all time high, foreclosures inventory is huge and still growing. As banks release this supplies of forclosed houses into the market it will put downward pressure
    on house prices.Property taxes are also shooting up.

    People are walking away form their homes. Everybody is worried about their jobs. Who in this environment is crazy enough to will to lock themselves in one area and get trapped by a house, when layoffs could happen
    at anytime?

    To buy a house we still need to borrow an obscene amount of money, and be stressed into paying a mortgage for 30 years. What kind of life is that?

    Mortgage is french word “Mort” + “gage”
    “Mort” = Death
    “gage” = gamble

    so people need to make a 30 year “death gamble ”
    to own an overpriced, money pit, lose theif financial freedom and get locked down to
    a specific area?

  • William

    At the end of the day, I still feel sorry to see so many people lose their homes. I can think of very few things in our lives that are worse than this.

  • t.cornwall

    This is crazy!!, average defaults remain in home for 18MONTHS!!. lets do the math: let say rent is 1200$/month
    this is 14400$/year post tax money!!

    This means 19000$ pre tax money. Meaning these people
    who got foreclosed on got a free gift of 20K$, for being irresponsible.

    I for one, do not feel sorry for them. They should feel sorry for us dupes who work for a living, pay our mortgage and lived below our means and are now paying for their mistakes.

    These home do not belong to them, they haven’t payed for them yet. I don’t care if foreclosures drag down my home price, defaulters need to return houses that they can’t afford. Otherwise, the innocent tax payer will become the victim of theft. Defaulters already got a nice gift by living rent free for 18months.

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