So what if a few million "little people" people lose their homes...
Why should lenders and servicers raking in current profits worry about the future when the getting is so good right now?
For two years now at unsustainabubble.com I have been trying to understand/reason out why lenders and servicers are not modifying loans through principal reduction. I hypothesized that it was due to special tax loss carry forwards that made foreclosures with 50% loss severities OK, since the institutions would be paying reduced taxes on inflated and artificially induced profits from bailouts etc.
What will be the Tipping Point for Home Prices?
In California, increasing numbers of Foreclosures on higher priced residential housing is forcing the hand of sellers, many of whom have capitulated to market pricing in order to get their home sold and move on. Since there have been a few more sales at the higher end, the median home price appears to be increasing, but don't be fooled by statistics. A ton of foreclosed property is sitting in inventory at the financial institutions and they are releasing it as slowly as possible, presumably in order to maximize values at the time of sale. Short sales are still not working very well and the gap between sellers expectations and Market Prices has never been wider. Will capitulation at the high end by sellers be the tipping point for much lower values in Bubble States?
The YouTube video below demonstrates that ...<< MORE >>
Recent Article Points one Good Way to Fewer Foreclosures
Today I read an article from Milken Institute President Michael Klowden and Regional Economist, Ross DeVol, that provoked an immediate response to the Editors at the Milken Institute. My letter is reproduced below. Take a look at what out of the box thinking could do with enough support.
6/08/09
Dear Sirs,
Regarding your recent Op-Ed piece How to Rebuild U.S. Home prices and Fix the Economy.
I thank you for your clear thinking and willingness to propose ideas from outside the box to solve the underlying problem of negative equity in residential housing. I have been writing about the failure of government initiatives to address negative equity in Loan Modification programs and bubble issues in general for the better part of two years at www.unsustainabubble.com . During this time, increases in negative equity have continued un-abated and thanks to gutless ...<< MORE >>
How Low can Single Family Real Estate Prices Go?
Perhaps the question should really be, how low will all real estate prices go during this recession/depression?
I had an email from a gentleman this morning that thinks much the same way as I do about the economy in general. He is currently considering relocating his principal residence to a different area and upgrading his home while taking advantage of current lower prices. He is in the enviable position of having the cash to back his intentions. Of course his worry is that he will buy now and that prices will continue fall, resulting in an unintended financial loss. In answer to his question. He said "I am thinking that the next wave of foreclosures is going to hit the market in the next 3-6 months, which would drive the prices down further. That would be the time to buy. What is your ...<< MORE >>