“But now faced with the specter of losing foreclosure, there’s a chance policy makers will wake up to the stark reality that only through repossession, through the efficient reallocation of REO properties back into the market, can the housing truly heal.”
Excellent conclusion, imo, although I know others disagree.
Yes.
Good article. It states the true nature of the problem, and not the bogus sideshow that innocent up-to-date mortgage payers are are being thrown out of their houses enmasse. Or that homebuyers are somehow paying the wrong people, and might lose their homes.
It also recognizes that the problem probably isn’t that bad in reality; only the initial, emotional perception - fed by politicians, attorney generals (more politicians), tinfoilers and scumbag, exploitative lawyers - of it is.
So basically, my house will be worth a quarter what it is today, and we’ll be forced to either ruin our finances or stay in what will certainly be a high-foreclosure ghetto for 15 years until we pay our loan right-side up in order to fix this problem.
Me and millions of others, that is. Boy I love getting raped due to the failures of others.
I agree that foreclosure is the only way to clear properties that actually should never have been sold to the buyers because they could only qualify with special exemptions forced by government, but I don’t agree that ‘policy makers’ will necessarily ‘wake up’ before the election. Which means the problem will fester and only get worse over the next few weeks.
Happily, the election is very near and if Republicans really do win big, particularly if Christine O’Donnell wins in Delaware, then there is the chance that recalcitrant Dems will be forced to admit that their interventions have only made a bad problem worse and that removing their incentives has to go. Then the foreclosure paper problems need to be dealt with and the properties put up for distress sale, thus setting the floor.
So, I’m looking at at least three years of work-off before we get anything like a normal real estate market.
And I’m not referring to the market of the 2000’s. RE gains of 1 to 2% per year should be the normal equity gain, IMHO, outside of sweat and investment-improvement equity.
Failure has to be allowed to take place in order for capitalism to work. It’s sad to watch sometimes but it has to be.
“...efficient reallocation of REO properties back into the market, can the housing truly heal”
THAT should have been done up front... without all the Liberals’ hysterical, dirty politics!!!
In other words, these "lenders" holding these mortgages as part of securitized mortgage bonds may find themselves in the same position as someone who buys a property only to find that the previous owner left it with some kind of fatal flaw (e.g., soil contamination) that effectively makes it worthless. Very often, the best course of action in that case is to try to negate the original transaction.