I just don’t see the big tragedy. Most of these people have little equity in these homes as they put “no money down.” They were likely renting before and will have to again. Not an incredible loss if you think about it.
Imagine if Barack Obama said that…
that would be increadible! I think the concern is that foreclosures in a neighborhood drive general that areas px’s down. As you took at comparable sales in a condo building and there was a short sale @ 50k below the “market value” you’re no longer willing to pay that market value- so now Joe Blow who has to move to Kansas for a new job and had 200k in equity lost 50k bc of it. I would assume any intelligent homeowner will also be lining up at the appraisal district trying to get their tax basis reduced- decreasing municipal income. I’m sure there are more reasons and I don’t necessarily agree that they justify protecting artificially inflated home prices- but they are concerns nevertheless.
i recall in california there were those individuals that had bought in 98-99 and saw their homes triple in value, they loved their homes but recognized that their houses were over valued, so they monetized it by selling to an investor and then entered into a long term rent agreement. i’m sure they could now buy back their house for probably what they paid in 98-99.
“Not an incredible loss if you think about it.” Ignorance is bliss I guess.
WOW…with all due respect Pinkman, maybe finance is not the field for you
Well, when you walk away, your credit is whacked for 7 years. So no more credit buying for all those people. This means businesses won’t be selling stuff to a large number of people, so their revenues will be going down, that means they may have to downsize, so a whole bunch of people will be out of work, which of course means that even good credit folks won’t be buying much. Then of course, foreclosures don’t necessarily mean that the bank can recoup their losses. Many places need work before they can be sold as a foreclosed property. The increase in foreclosures means that the prices of homes in general will be depressed, meaning more people may walk away and banks will have even more trouble recouping losses. So lots of other parties get screwed by this. It’s a bum deal for all. Basically, I think of the problem as like the guy who tied a whole bunch of balloons to his lawn chair and floated way too high and is running out of air or freezing to death. The trick is how to float down slowly before you die of cold/asphyxiation without falling to your death.
You use a BB gun and shoot the balloons when you want to come down.
This is a SICK foreclosure video: http://www.investorvillage.com/smbd.asp?mb=2234&mn=142527&pt=msg&mid=5759234
JoeyDVivre Wrote: ------------------------------------------------------- > You use a BB gun and shoot the balloons when you > want to come down. Yeah, except your mortgage broker sold you a gun with expanding bbs that don’t fit the gun anymore.