Posted on 04/02/2013 6:39:53 PM PDT by whitedog57
Realty Trac reported last week that 300,000 homes in the US are zombies. And another 10.9 million homeowners nationwide remain at risk because they owe more than their property is worth (better known as negative equity).
“While Florida leads in volume of zombie properties, Kentucky, with less than 1,000 zombie properties, leads in percentage, with zombies representing 54 percent of its total foreclosure inventory. Zombies in Washington, Indiana, Nevada and Oregon also constitute 50 percent or more of the properties in foreclosure, according to the report.”
Wait a minute! How can this be true when we have 15 Federal government mortgage modification programs including HARP and the infamous Attorneys General Settlement that were supposed to fix the problem of negative equity and revive the housing market?
Perhaps the Federal government promises too much as they did with the New Jersey shore. Philly.com has an interesting story entitled “Sandy-hit Shore homeowners ask: Where is the money?”
“This was my summer home,” the Delaware County plant manager said of his little rancher on Third Street in Ocean City, N.J., flooded with its foundation cracked – totalled, really – by Sandy.
Why is the Federal government involved with paying damages on a vacation home??
The same holds true for Attorneys General Settlement. Most of the claims against lenders were the non-event called “Robosigning” where an overwhelmed employee stamped a foreclosure file (hint: virtually everyone in those piles of folders had defaulted on their loan). Robosigning spawned “Robocop” Richard Cordray who is now the head of the Consumer Financial Protection Bureau (CFPB), an unaccountable bureau that is staffed by “fair lending” activists. Here is 184 page “Ability to Pay” edict from Cordray himself.
Of course, the CFPB exempts Fannie Mae, Freddie Mac and the FHA (the government housing finance monopoly) for 7 sevens so that they can write their own rules. (Wait a minute! Why weren’t lenders given the same 7 year exemption?)
Like in Amity Shlaes’ “The Forgotten Man: A New History of the Great Depression ,” we always seem to forget that government usually causes the problem in the first place (e.g., Clinton/Cisneros/Cuomo’s National Homeownership Strategy) then compounds the problem with confusing and changing “solutions” like HAMP, HARP, the AG Settlement and now … drum roll … FHFA Announces New Streamlined Modification Initiative Essentially, this is a no-doc refi plan for Fannie Mae and Freddie Mac-held/insured mortgages.
Wait a minute! I though Dodd-Frank and the CFPB banned the use of no-doc loans!
And on and on it goes. Rather than letting the housing market heal, the government keeps ripping the bandages off.
The good news? The government-controlled mortgage giant Fannie Mae, which needed a $116 billion federal bailout after the housing bubble burst in 2007, said Tuesday that it earned a record $7.6 billion in fourth-quarter 2012 and $17.2 billion for the year. Fannie Mae has been benefiting from “the housing market’s turnaround and sustained declines in the number of soured home loans. … Fannie is [also] losing less money on homes it sells through foreclosure as prices in many markets rise.”
That allowed Fannie Mae to pay $11.6 billion in dividends to the U.S. Treasury Department last year. Since 2008, it has “paid taxpayers $35.6 billion in dividends.” Looking ahead, “we expect our earnings to remain strong over the next few years,” Timothy Mayopoulos, president and chief executive officer, said in a statement.
Here is Fannie Mae’s stock price as house prices started to slip.
And here is the reaction today of Fannie Mae’s stock after the announcement.
Fannie Mae (and Freddie Mac) were largely responsible for the housing bubble and crash, yet politicians can't bear to do anything with them.
Apparently, even Fannie Mae can’t stem the tide of zombie foreclosures.
Why post this?
A government agency that makes money foreclosing and selling citizens houses. Seems that the Government is the Zombie to me.
The same creative accounting used as in the early 2000s. Another fact is that much of the loser mortgages that Fannie, Freddie, and FHA had are not sitting on the Feds book at full price as assets which they print money against.
“are now sitting”
I would like to know what a zombie house is. Is it from the walking dead or some such?
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.