Forget Federal Gov Bailouts … beware Local Govt

[(former)FormerSanDiegan]

In the U-T today there was an article suggesting local efforts to prevent neighborhood blight, by buying up foreclosed properties.

http://www.signonsandiego.com/uniontrib/20070921/news_1b21loans.html

[(former)FormerSanDiegan]

My favorite (NOT) proposal …

“Form a regional land bank to buy foreclosed properties to create affordable buying opportunities while guarding against neighborhood blight. Purchased homes could be rented at affordable rates and later sold at affordable prices.”

Who wants to compete with shady City Hall or the County-appointed bureaucrats on discount property ?

Brought to you from the same guys who brought you the pension scandal/mess.

[JWM in SD]

“Adelizzi said his concern was not for the health of the mortgage market, but for the people who have gotten caught up in foreclosures. The market eventually will correct itself, he said, “but we want to see it happen in a way that causes the least amount of pain.””

Ah yes, well why don’t you fund that yourself Adelizzi??? Or maybe the SD Pension Fund can buy those foreclosures as an investment in the city itself right?? Oh yeah, forgot about Ameranth.

These people are mental midgets….

[asragov]

The problem is too big, and the wheels that are in motion cannot be reversed. Governments will not be able to prevent the inevitable.

San Diego’s government probably doesn’t even have the money to put the telephone lines underground – they will not have any meaningful money for this.

San Diego homes will not be worth what they were during the bubble times for a long, long, long time, and there is nothing a government, local or federal, can do about it.

Government is too inefficient (i.e. they will recognize and act on problems too slowly). Even when they begin to act, it is unlikely to have much of an effect on prices.

[(former)FormerSanDiegan]

Just another rat hole for the City Council to stuff money down. If any action in this direction is taken it will end up putting Gov’t money into the hands of city council buddies.

[NotCranky]

They will probably buy up all Nick Inzunza’s slumlord units at “market price” as a concession for the fact that National City doesn’t have a NFL team.

Where is Drunkle when you need him anyway? Sometimes I think we are the only ones that understand eachother.LOL

[SD Realtor]

Asragov I respectfully disagree and believe you are missing the point. It is well understood that the bailouts will not stop the depreciation trend. However to simply handwave it away is not appropriate. It is one thing for people on the website to express bitterness for not being able to buy a home. To berate foolish buyers over the past many years for buying something they could not afford. Similarly I would guess the prevailing (and incorrect) belief by everyone who has been prudent was –

– It will not affect me because I have been prudent.
– I will not have to bailout these people.

Well what we are seeing is that these two assumptions have been dead wrong. You and I and everyone else from hardcore bears like JWM to others like Alex Angel and temecula guy and all the other players here will donate some of our tax money be it local, state, federal, whatever… in some way shape or form some of it will wind its way to the FHA or some other platform that in the long run will either bailout someone who f**d up or purchase a new jumbo loan on the secondary market or something like that.

To say, “oh don’t worry it will never stop the depreciation” is an improper response. Especially because there will be more programs like this. Our government is hell bent on continuing to promote spending and they will back that policy up come hell or high water. These programs will be rolled out at potentially federal, state and local levels. So I would kind of hold my breathe for awhile.

SD Realtor

[JWM in SD]

My definition Moral Hazard:
When some poor J6P in flyover country making 40 or 50K a year, and who will never ever step foot into a 700k home much less own one, gets a huge tax increase to bailout some SoCal DBag who overleveraged on a 700k house. Will there be political ramifications at that point? Is that when a Ron Paul figure comes into prominence? Or do my kids get to pay this off?

This may sound extreme to some but that’s what it boils down to.

[PadreBrian]

Yeah this plan would never work. What’s the # of foreclosures in SD county? 30,000?

So the county buys: 30000 homes*450000(average home price)=$13,500,000,000
13 Trillion dollars. Yeah, that will work. hahahahah

[Sandi Egan]

$13.5B

[sdrealtor]

SD R,
You are right on target and these folks just dont want to believe it. Piggingtons are the minority by far. The vast majority of Americans are invested in homes retaining value and want to see government/industry intervention in times of economic distress. There will be numerous efforts from every level of government and industry to deal with the problems whether we like it or not. While no amount of intervention will likely solve all of the problems or keep prices elevated at these levels, the invisible hand will not be left to take care of the market on its own. Anyone that completely discounts the collective impact of all that is coming is a bit naive imo.

[SD Realtor]

It is scary… we have agreed on to many things lately.

SD Realtor

[lendingbubblecontinues]

sdr-

I am sure you are right with regard to efforts from government and industry. There are, however, more holes in the dike than there are thumbs to plug them, I believe.

Sadly, the days of the U.S. enjoying higher living standards than the majority of the rest of the world are numbered.

[sdrealtor]

lbc,
I agree with you about there being too many holes to plug. But plugging half of them (or any % of them for that matter) slows down the deluge. The longer it goes on, the longer the market has to inflate itself out of some of this not to mention the addition of cockamamey creative solutions you or I would never even dream of.

[lendingbubblecontinues]

true

who knows? perhaps we are already a province of China and don’t know it yet?

[Author]

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