I’ve been reading tidbits of the government wanting to help the banks and homeowners in preventing foreclosures, but what can they do? Raising taxes to bail out banks or consumers is bad for the economy and would slow consumer spending. Restructuring debt could lower returns for bank shareholders and MBS investors who own the debt. The only way to prevent payment shock is to put interest rates back to 1% or 2%, in my opinion. What can the government do? What percentage of people will face payment shock?
Let’s also remember the tax liens. I checked foreclosure.com today, and was surprised how many tax liens are out there in Poway alone. Whereas most NODs are in the lower-income areas of Poway, the tax liens are in the upper-middle income areas. Again, people I know are on the list.
If any of you got a subscription to foreclosure.com, you would probably see people that you know in pre-foreclosure, bankruptcy, or with a tax lien. The thing is, you would never know it unless you checked out the website. They don’t walk around with a sign on their forehead. It’s just another reminder that we can’t judge a book by its cover. People act like their life is so together, while in reality they are crumbling inside, their finances are a wreck.