Housing crisis worsens as economy weakens

Housing crisis worsens as economy weakens
Monday December 22, 2008, 4:12 pm EST

WASHINGTON (Reuters) - The desperate straits of many U.S. homeowners showed in new data released on Monday, suggesting efforts to help them are having limited success.

As the recession throws more people out of work, the rate of re-default on modified mortgages is rising and may worsen as the economy deteriorates, banking regulators said.

After much browbeating from Congress, banks and other mortgage lenders are beginning to do more, to modify home loans so that distressed borrowers can avoid foreclosure.

But the latest figures from regulators raise questions about how modifications are being done and how much they help, even as foreclosure rates hit record-setting levels.

“You have to think that it will get worse before it gets better,” John Dugan, the U.S. Comptroller of the Currency, said in an interview with Reuters.

Critics say most loan modifications up until a few months ago were temporary and not aimed at providing for sustainable payment plans, so it comes as no surprise that homeowners are defaulting.

At the same time, a lenders’ group known as Hope Now warned on Monday that the number of U.S. homeowners seeking help to avoid foreclosure would double next year to 2 million.

The housing crisis and the recession will keep Congress busy when it returns on January 6, 2009, from a holiday break, and preoccupy President-elect Barack Obama after he is sworn in on January 20.

Between January 6 and the inauguration, congressional Democrats are expected to introduce legislation urging more aggressive efforts to help those homeowners who are in over their heads.

A bill being drafted by Massachusetts Rep. Barney Frank might include a sweeping mortgage relief plan from Federal Deposit Insurance Corp Chairman Sheila Bair, a House aide said on Monday.

The bill is sure to insist that more be done to help homeowners under a plan already under way – the Treasury Department’s $700 billion Troubled Asset Relief Program.

That plan, known as the TARP, has given hundreds of millions of dollars in aid to banks and, more recently, to major U.S. automakers. But Frank and other Democrats contend the TARP is doing little to help homeowners.

Excerpt: http://finance.yahoo.com/news/Housing-crisis-worsens-as-rb-13896308.html

I am having my doubts about just how widespread this pain actually is.

I drove up to Fordham on Saturday morning to pick up my son for Christmas vacation. [Curiously, an electronic sign at Fordham University was wishing everyone “Happy Holidays” - go figure.]

Traffic on the NJ Turnpike was bumper to bumper - literally, in a few instances. When we got to the Bronx, the streets were crowded with shoppers.

After lunch, we took the Metro North into town and had to stand. Got to the city, Grand Central Terminal was bustling. Checked into the hotel. “Do you have a full house?” I inquired of the desk clerk. “Pretty much. It’s starting to fill up.”

Walked over to Times Square to see if The Naked Cowboy was braving the very inclement elements. He wasn’t. But more appropriately clothed citizens were. And it was, as my mother used to say, “bickering”. “It’s bickerin’, Joe, put a hat on ye!”]

Bryant Park was hosting an ad hoc collection of Christmas kiosks that were hawking all manner of Christmas tchochkes - an oxymoron, if ever there was one, I know - and the skating rink was clotted with skaters.

No one at the hotel bar seemed worried about . . . anything.

And I don’t think that that is a skewed sample. I have made similar observations here.


It is odd isn’t it Joe. I got most of my Christmas shopping done last and the stores and roads were packed.
Also booked two inspections just before Christmas.

Strange economic times indeed.

well things are pretty dead in TN (Knoxville) i have not got any inspections this week i had one but it was canceled due to Money problems, Last only 2 one was ended early due to foundation problems and 1 canceled due to mortgage funding, I know it does get slow but used to have 1 a day at least, back in the summer 2 a day
Stores are not that busy nor restaurants

They are out shopping their *** off so Bomma can bail them out next year…

Since when did anyone do anything proactive?
Just keep doing till you can’t do it any more.
The next pres. is going to save us all.

It’s been strange around here, but after Nov. 5th business is picking up.
I had 5 inspections between Nov. 13th and Nov. 20th.

I inspected this one Sat. Built in '07, not a repo. The buyer was a first time home buyer ( 28 yr. old female pharmacist) $195.000.


I booked this one today for the 29th. Been on the market for quite a while.
Built in 1971. $275.000

Foreclosure map.

Search Foreclosures Nationwide!

Check your town, is very surprising.

The foreclosure map seems to support my independent anecdotal observations.

The number of foreclosures is well below 1% in every state but Nevada where the problem is attributable to speculators intent on flipping. Those foreclosures are not for primary residences.

The same is true in Florida.

Like most things, you are clueless about Florida.

Foreclosure rate in my area is pretty high, both past and present. The majority of them are on the lower end value wise. But not all. Which is why I say the market is very strange in my area.

Interesting Article.

And another one.

Did Foreclosures Change The Presidential Election?

Seven of the top 10 foreclosure states voted Republican in the 2000 and 2004 presidential elections, while three states went Democratic. This time around the Democrats captured eight of the top 10 foreclosure states. [VIEW FULL STORY



None of the candidates in 2000, 2004 and 2008 presidential elections possessed the economic competence, leadership ability and sincere determination to do what is necessary to make the economy healthy. But yes, the “purple bloc” at large probably gambled on that hard left neophyte Obama because, if anything, he is a break from the 8 years of self-serving and inept neocon tyranny that Mc Cain would have continued.