I’ve been waiting a long time to say this…. somebody finally has found the guts to tell the truth about the ongoing problems in the housing market. In its news article entitled, How toRescue the Housing Market: Foreclosures!, CNN Money reports that according to industry experts (not sure who that could be – but that’s the somebody I’m talking about), if the Obama administration really desires to get us out of this prolonged housing debauchary (that our curretn and past administrations created), it needs to speed up the foreclosure process instead of slowing it down. Amen to that! And, long overdue.
Sales volume and prices have been down for three straight quarters and there continues to exist a very large and ominous inventory of homes who’s mortgages are significantly delinquent. How long do we need to drag this out? If we drag out a cold, we may not recover! The banks backlogged inventory of seriosuly deliquent mortgages is being blamed on the banls desire and need to improve internal paperwork and processes to better conform to government regulations. But, who’s buying that story? The only significant benefit for allowing foreclosures to sit in limbo is to let banks keep bad asset off of their financial balance sheets. This benefit also helps keep bank stock values propped up. And, if we really dig into results of all the government programs aimed at helping homeowners, we find that more than 60% of all loan modifications fail in less than a year due to non-payment by the borrower. If we track this past 3 years, I’m sure that we will find out that close to 95% of all loan modifications will eventually end up in foreclosure. Worst of al, we, the tax payer, are paying banks a fee for bunk results!
We need this recovery to speed up now. Doing that requires that we hit real estate home value rock bottom. One way or the other, it will happen. Why wait?