No, not me. John Mulkey, Housing Guru from Waleska, Georgia, calls for principal reductions. Today we examine his arguments and a beautiful short sale in Shady Canyon.
Irvine Home Address ... 96 CANYON Crk Irvine, CA 92603
Resale Home Price ...... $4,500,000
Punishing Foreclosure Victims Only Continues The Pain For All Of Us
"While news stories, articles, and blogs continue to be written about “Strategic Default” and how those facing foreclosure shouldn’t be allowed to walk away or have their mortgage balance reduced, punishing foreclosure victims only continues the pain for all of us. The problem we face isn’t one of a few hundred or even a few thousand who carelessly spent beyond their means;"
It is way, way more than a few thousand who carelessly spent beyond their means. Mortgage Equity withdrawal was fueling the US economy for the last decade. The attempt at minimizing the issue is hereby exposed as fraud.
"this issue touches tens of millions of U. S. homeowners, the majority of whom acted responsibly, and with the knowledge available to them at the time. Most thought they were making wise choices. How can we blame the homebuyer for not seeing the fallacy of never-ending home price escalation?"
The sheeple bought on the foolish advice of realtors, the experts, probably using a toxic loan per the foolish advice of their mortgage broker, another expert. I will acknowledge that we cannot blame homebuyers; we should blame realtors and mortgage brokers who peddled that bad advice as experts.
"In their recent testimony before Congress, the heads of the big banks said they didn’t see it. Jamie Dimon, Chairman and CEO of JP Morgan Chase said, “Somehow we just missed that home prices don’t go up forever,” an erroneous assumption shared by the U. S. Treasury. And if the “brilliant” minds on Wall Street didn’t see the crash coming, who could expect those on Main Street to have superior knowledge? Regardless of what Mr. Dimon may have known, few anticipated the intensity of the housing crash or the scope of its reach."
When I read this quote, I burst out laughing. The author of this post was using this quote as support for his argument that experts failed and therefore he is not responsible for anything. The irony of the quote and the subtle sarcasm in Mr. Dimon words completely escaped the author. And for the record, many people from Wall Street to Main Street saw this coming, me included.
"It’s time to stop blaming the home purchaser and to accept the only workable solution for both them and for the housing market in general. It’s time to see beyond what we perceive as the “morality” of the solutions for those facing foreclosure, and to look to what solution best serves the country as a whole. And that is to reduce the principle of homes underwater to their current value."
WTF? The reasons for me not wanting to give money to my underwater neighbor are many and complex, and "putting aside morality" and taking one for the team are not likely to persuade me to change my mind. Remember, responsible homeowners are NOT losing their homes. Who am I supposed to pity? The genius whose idea of personal finance is a Ponzi Scheme?
I have an idea; why doesn't the author start writing personal checks to the lenders himself. Isn't that what he is asking us to do? Somebody has to lose a great deal of money, and as someone who had nothing to do with the fiasco, I really don't want it to be me. I don't want the government to use my tax dollars to bail out anyone, much less a HELOC abuser who looks down on me as a lowly renter.
"Such an action would immediately help to stabilize a large portion of the market, and would protect neighboring homes from further declines in value. It would not affect the bank’s or investor’s equity, for the homes are only worth what they’re worth; and foreclosure sometimes results in below market returns."
The problem with banks is not the equity in the property, it is the book value of their loans. Writing off the balances would wipe out our banking system, that is the problem. The author thinks this has something to do with home values; it doesn't. This crisis has everything to do with bank loan balances, capital ratios, and borrowers making payments. Since he has incorrectly defined the problem, any solution he comes up with will be erroneous.
"Those who speak of the inherent unfairness of such a solution fail to consider the ultimate damage of continued foreclosures, the consequences of which will depress home prices for years."
So what? Home prices are what they are. What difference does it make to society if home prices are up or if they are depressed? If people are living READ MORE: http://www.irvinehousingblog.com/blog/comments/96-canyon-crk-irvine/#more
Although they say foreclosures are not going to really help the housing crisis, many says that as many foreclosures happened, the rate of buying vs renting changes as well, with people now aiming to rent rather than buy to avoid foreclosures. Nevertheless, 2012 is a year where experts says that more foreclosure will happen in the housing market. Online real estate school
Posted by: Winalt Home | 01/10/2012 at 02:08 AM