My previous blog posts illustrated the problem caused by banks by delaying or pushing 2010 foreclosures into 2011. The financial industry again causes historic problems with our economy and nothing changes.
In the early ‘80’s mortgage interest rates were in the 18% range and higher. This stopped housing in its tracks.
In the early ‘90’s, the savings and loan industry caused the recession and housing suffered because of their lending practices. The Resolution Trust Corporation was established to accept non-performing loans. Banks were able to move forward because the “bad” loans were being addressed and off of their books.
Today, the financial industry again sucker punches housing with its unethical lending practices. The entire country suffers and each family has been left on an island. Who wins? Not the families and not the country.
We continue to see how the financial industry impacts families and our economy. Now the pendulum swings from a freewheeling give away to restrictive loan practices. The taxpayer is now financing the legal defense of Fannie Mae and Freddie Mac being investigated for fraud --- even before the subprime mortgage lending crisis!! $160,000,000 and counting!
Not only do our politicians do not learn from history, they choose to ignore the remedies. By banks pushing foreclosures into 2011, the housing recovery will be pushed further out. It will not be a month to month relationship but at least a 6-month swing. In other words, the housing recovery could have happened this year but will be pushed into 2012. AND, a seller’s market will return almost instantaneously.
Subscribe to:
Post Comments (Atom)
2 comments:
Why do you think the banks are foreclosing on houses that will sit empty and deteriorate? It is a buyers market at present, but there aren't very many buyers.
Please explain why you think it will become a sellers market?
Pam - I don't think I was clear in my post. It certainly is a buyers market now and most of 2011 will remain a buyers market. However, in my opinion, I think the housing market will turn on a dime and become a sellers market in 2012 because of pent up demand and inventory will reach normal levels. You are right - buyers are not buying - thus the pent up demand will occur.
Post a Comment