Some good news up in Detroit, home sales are up 15% for December and January.
Home forclosures usually cost banks/inst. about $50K per home, it would benefit them to restructure the loan to keep the current home owner in the home. Makes plenty of sense, unfortunately they probably don't have that sense.
Posted by peter at February 16, 2008 08:46 AMEvery now and then reading the words of Reverend Jackson reminds me of what it really means to tell truth to power--its so rare that what is really only common sense seems absolutely stunning.
aimai
Posted by aimai at February 16, 2008 08:59 AMSomeone should tell the good reverend that loans and homes no rhymee.
From the grave: "If the mortgage don't fit, they should rewrite that shit."...These days courtrooms are a little less fun without Johnny.
Posted by TIKI AL at February 16, 2008 10:55 AMWith Blu-ray winning the Hi Def DVD war, I think a good way to spend the rebate would be to go get a Sony Playstation 3 and a bunch of games. You get the video game machine AND the Blu-ray player all in one.
Great election year strategy: Buy everyone a PS3!
Posted by at February 16, 2008 11:09 AMJay - You are dead on right today! Weren't low cost loans and reasonable mortgages part of the whole empowerment zone theory of home ownership? They haven't bellied up. I would never have been able to buy a house were I not willing to put something - like stability of the tax base and interest in my town - back and live in a home that suited my means. So I had to save and struggle for a few years to make payments - babies don't really encourage that process - but there was never a sense in the town that anyone was going to go above their means and get a ridiculous bargain on a long term investment. There are no housing "entitlement zones" in this country. Health care, on the other hand, should be universal and not an opt out program. I so disagree with Obama on many things.
Posted by jeter at February 16, 2008 01:19 PMJay,
you don't seem to grasp that the banks *don't want to foreclose* and that they lose money on foreclosing, especially in a market where no one wants to buy. So what stops banks from renegotiating loans? the fact that the owners of the loans arent' actually the banks but larger, more complex units who don't have the knowledge or ability to renegotiate the loan. What we have here is a mess of no mean proportions and if we don't work at it from the bottom up the system will collapse from the top down. Its not that banks won't want to loan money anymore because they can't be sure of an asset backed foreclosure, its that there won't be any money to loan anyone because both the banks and the suckers who bought on the mortgage risk have discovered that they loaned money on assets that weren't worth as much as they thought they were. People are going to walk away from the house loans--they already are--and the banks and the shareholders and lots of people who thought they owned some actual security are going to discover they don't. The taxpayer is going to end up bailing out the banks for their ppoor judgement. Personally, if I had to spend five cents on the dollar forcing banks to renegotiate the old loans to the old homeowners at reasonable rates vs. creating another resolution trust/bailout scheme for the banks' owners I'd take the *cheaper more effective* method of stabilizing the economy and keeping the housing bust from growing.
aimai
Posted by aimai at February 16, 2008 01:27 PMJay, it may not be the logical thing, but it is the human thing to do!
Posted by capitalistpig at February 16, 2008 03:00 PMSome people borrowed 130% on an over-inflated house with 0 down, bought a new Escalade and some breast implants with the x-tra 30%, took a trip to Vegas, blew the rest and lived in the house never intending to make 1 payment until the Sheriff finally kicked them out.
Some were flippers who were seated in an Easyboy when the music finally stopped.
And then there were the well meaning but unsophisticated consumers who were preyed upon like members of a megachurch.
Posted by TIKI AL at February 16, 2008 04:10 PM
Why do we have to bail out people that were stupid enough to sign up for these loans?
We should just make everyone in the country take a test for basic financial intelligence. Those that pass get to have mortgages, bank accounts, brokerage accounts, etc... Those that fail shall be given a 10 year ban on home ownership and a coffee can to keep their money in.
Posted by outraged at February 17, 2008 08:38 PMI'm of two minds on this.
On the one hand, it's never a good thing to have families kicked out of their homes, especially given the utter lack of a civilized safety net in the United States.
On the other hand, housing prices are way out of control. The prices have to go back down, and that may not happen if people are allowed to hold on to homes that they can't afford. I don't want this to become a game of musical chairs where people who were in the right place at the right time get unjustly enriched, and young families looking to buy houses for the first time now have to pay out the nose.
We're in a big mess and I can't see any way of getting out of this that doesn't involve someone getting hurt. Either existing homeowners get screwed by losing their homes, or new aspiring homeowners get screwed by having to pay artificially inflated prices.
Posted by Josh G. at February 17, 2008 11:51 PMthe banks are paying the price for loaning money to anyone who had a pulse
the Federal Reserve was aware of the problem long ago and did nothing, conservative ideology has utterly failed
Posted by gay veteran at February 18, 2008 07:22 AM