LA Times: Bad Outlook for homeowners

[dbapig]

dba

“But you are dealing with 2 million families. That is a lot of voters with discontent in an election year.”

And what about millions of families that have been priced out of decent homes because of those 2 million families who lied (not all I’m sure but most now agree lying on mortgage forms was one big reason we are in this mess)? The 2 million families are being foreclosed out of their homes because they bought homes they shouldn’t have bought and just ended up driving up the price of homes?

Just a thought

[TheBreeze]

I too have libertarian feelings. But you are dealing with 2 million families …

Where did you get this number? Are you sure the actual number isn’t something like 200,000 families and 1.8 million speculators?

[bsrsharma]

TheBreeze – This

Indeed, what was once a problem confined mostly to economically struggling areas is quickly becoming a national phenomenon. Last year, there were 1.2 million foreclosure filings in the United States, up 42 percent from 2005, according to RealtyTrac, a firm that analyzes such data. At current rates so far this year, RealtyTrac expects foreclosure filings to hit two million in 2007, or roughly one per 62 American households — a rate approaching heights not seen since the Great Depression.

is from http://www.nytimes.com/2007/09/02/business/yourmoney/02village.html

I have seen these (1.2 million for 2006, 2 million in 2007) expected to add up to 7 million over 3 to 4 year period. Since all ARMs haven’t reset yet, the worst is yet to come. It may crest at 4 million per year in 2008 & 2009.

[TheBreeze]

bsrsharma,

I don’t dispute the foreclosure numbers. I just dispute that all of those foreclosures will happen to families. When you had “investors” buying multiple houses at 100% financing (how many did the Montecastros buy? 50? 100?) it’s obvious that each foreclosure isn’t going to result in one family on the street.

More likely, the ratio will be something like one family displaced for every 5 foreclosures. Do these families deserve assistance from the federal government? If they financed at 100% and aren’t losing any equity and simply have to go back to renting … is that something the federal government should be concerned with?

It certainly creates a perverse incentive. Under your plan people would have an incentive to buy homes they can’t afford because they know the federal government will be around to bail them out. I don’t want to live in that world.

[bsrsharma]

Thebreeze: Estimated 7 million total foreclosures. Estimated 2 million+ families. Per your 1 in 5, it becomes 1.4 million.

I have no interest in federal involvement beyond stopping 1099s for non-recourse loans only (i.e. pure mortgage, no HELOC). I am really keen on stiffing the lenders so hard that they will shiver before making the next loan. You get that by burying them in a mound of non-performing loans. The prices will slowly come down once mortgages become strict and elusive. It will be Japan asset deflation 2.0

[JWM in SD]

Response from Diane Wedner:

from “Wedner, Diane” hide details 10:24 am (25 minutes ago)
to
date Sep 4, 2007 10:24 AM
subject RE: from Diane Wedner, Los Angeles Times

Hi J***,

That wasn’t my opinion—it was a Q&A. I asked (I like to think I DO know which questions to ask– :->); Mr. Baker answered. A lot of our readers agreed with him.

Always good to hear from you.

Best,
Diane

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