San Diego Housing Market News and Analysis
The Nuclear Housing Bailout Option
Submitted by Rich Toscano on February 26, 2010 - 8:32pm
A couple of interesting bailout-related items crossed my desk today. I have given up on trying to keep track of all the bailouts, but these both relate directly to our beloved topic of shadow inventory so I thought I'd note them.
First, the White House is trying to ban any foreclosure unless the loan in question has been screened for HAMP, the government's flavor-of-the-month home loan modification program. As I understand it, HAMP has been fairly useless, for reasons I will describe below. But no matter -- an extra mandatory step to screen every mortgage for eligibility will further delay the foreclosure process, perhaps resulting in even more delinquent mortgages remaining in pre-foreclosure limbo.
The reason that HAMP and the government's other varied foreclosure prevention schemes haven't made much of a splash is that they don't address the main cause of foreclosures: that many homeowners owe more than their homes are worth.
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