Ralph- great minds think alike. I have been telling my short sale clients (and anyone who'll listen) the same thing. It's catastrophic isn't it? Best of luck and keep doing what you do.

The new Housing and Urban Development (HUD) initiative brings together foreclosure prevention counselors, mortgage servicers and other mortgage market participants in an alliance to help home owners who are facing default.

HUD No. 07-152
www.hud.gov/news/

The goal from what I understand is to provide at-risk borrowers the information and resources available in the marketplace that will allow them to keep their home by restructuring the terms of their mortgage or pursuing other options available to them. (Read my post on learning the word "Modification".)

Even the National Association of Home Builders has joined in the effort to promote the program~Visit NAHBs web site: http://www.nahb.org/

"HOPE NOW" encourages troubled borrowers to seek out their mortgage provider or housing counselor to help them explore alternatives to stay in their homes. 

Some encouraging programs aka a reason for a little "Hope" for consumers that are facing challenging times? 

 

Great Post.  I totally agree with you that this is a major issue. 

I don't think the government needs to "bail out" the borrowers in foreclosure or "bail out" the lender in trouble.  These people put themselves into the position they are in.

If the government is to do anything, it should be to EDUCATE.  Our school systems are a joke when it comes to educating this nations young on how to handle money. 

We live in an "instant" society that teaches our youth that if you want something now, put it on a credit card.  Buy your house with 100% financing.....  And guess who preaches this?  The Banks and Lenders!! 

That is a good analogy.  I had not made the connection between the natural disasters and foreclosure leaving families homeless.  Once you are forclosed on it is 7 years before that disaster is behind you and home ownership is likely again.  That is really sad.

It is going to be getting worse, and yet there will be deals for investors, The amounts are staggering however

Ralph, well when you put it that way it is a national disaster. Sad for everyone.

Ralph, With due respect, this foreclosure 'disaster' while having a huge impact on our economy and on the lives of the unfortunate families facing foreclosure, is nowhere near the unexpected natural disasters that our fellow citizens have faced in wildfires in So. Cal, Hurricanes' Katrina and Rita, the bridge collapse in Minn., and other natural disasters.

The families facing foreclosure have not lost their entire family history, photographs, heirlooms, and other precious memories that are irreplaceable.

The foreclosure disaster is a direct result of lenders and investors taking advantage of people seeking the "American Dream" be it their 1st home or their dream home. Predatory Lending has been watched by many government agencies for many years and they all either failed to act, or their pleas fell victim to politicians that were in the financial industries back pockets.

Now that the predatory lenders/investors, Countrywide at the top of the list, have been exposed, it is time to pay the piper. While Countyrwide's program to reach out to 82,000 homeowners with adjustable rate mortgages is a step in the right direction, what about the other 2.4 MILLION that have adjustable rate mortgages that are adjusting by the end of 2008?

I fully agree with you that the government should lead the way/create legislation to have the greedy industries that allowed/created this problem clean up their mess. The poor business decisions made by lenders and investors, and their disgusting tactics in manipulating people looking to be part of the american dream should, be paid for by nobody else but the people that created this problem. 

The government, TAXPAYERS, should not pay for a borrower's failure to understand what they were agreeing to. The party responsible for providing the information should be held responsible. 

Over the past years while this has been going on, I have on many occasions, counseled Buyers to avoid certain lenders that made my skin crawl. Many of them are now out of business.

This is just my opinion. It is an extremely complex situation to which there is no perfect answer. Sorry for ranting on.

 

Ralph,

Good post - it has made people homeless just like the natural disasters and it to is a disaster. What to do. I'm not sure but I wouldn't trust the lending institutions to help or clean it up.

Mike Lewis

It is a national disaster, just like the savings and loan crash a few years ago.  Both situations could have been avoided.

Ralph...As always a great post, everyone should pass this along online, you have huge problem, that needs attention.

Cheers, see you at NAR next Week Ralph.

I'm not sure I can agree. The fact is that 98% of all mortgages in America are being paid on time right now. Less than 1/2 of 1% of all mortgages are in foreclosure. The result? The banks just got two huge rate cuts. They will eventually get about 60-75 cents on the dollar of the 1/2 of 1% in foreclosure too. So from my math, the lenders are making out like bandits since Bernake flinched.

True, people are losing their homes but not at a rate significatly higher than any other time in history and in fact we aren't even near the rate seen during the depression years or the late 70s.

I'm convinced this will all blow over soon enough as the laws of supply and demand can't be avoided. Housing starts are way down, lender practices have tightened up, the job market is booming, and the dollar is low meaning increased foreign investment.

I'm bullish.

Education, Ralph, people need education. They still need education. I don't agree with financial aid at all any way shape or form. I do believe that there is a solution and a bailout of any kind would definitely do more harm than good - that's one lesson one side of the aisle has learned and the other side uses to buy votes. I definitely feel bad for people faced with or who have already "suffered" the loss of their home. They will, however, live to "fight another day." Thankfully it looks like we're finally getting mandatory licensing for all loan officers except a handful and I'll keep shouting about that, too.

Ralph,

Candace in Arizona sent me over.  I've bookmarked to come back after supper!

Mike in Tucson

Ralph, to your points and those of Dan Gobis in his comment above, I'm rather disagreeable towards the thought that all these homeowners got suckered into this.  They are adults, big boys and girls who may have families and other responsibilities that make us all want to pity them when we see them on the news, but they weren't cutting me in if things all went well, just as I wasn't cut in by any of the rest of the people who might not have been pinched in this situation.  To compare this to a natural disaster is ludicrous to me - and very irresponsible.  One can argue that nobody could predict the hurricane or fires, (and I say argue because those were still known risks for the people involved when they moved there or bought homes there) but as far as I'm concerned nobody caught up in this can say this is not their fault, any more than they can say they shouldn't have to pay off their credit card balances (which are generally far more in arrears than their mortgage by the way) even though they still have the stuff they bought with them.

The national disaster here is a complete lack of personal responsibility on the part of the American public, and the system that seems to happily cater to that.  Did everyone get bailed out of the internet-high-flyer-stocks-gone-bad they owned a few years back?  It was equally tragic if you want to apply that word - MORE MONEY WAS LOST on paper there I think, but frankly it doesn't fit in either situation.  If there are any minors out there caught up in this who have been unwhittingly duped without being of legal age to be expected to be responsible for their own choices, by all means, let's bail them out.  Otherwise, everyone else, you reap what you sow.  We all face that in the rest of the decisions we make every day.

One last thought, Countrywide and the rest of the lending servicers suspending amortization and whatever else they are doing are hardly doing that to be noble corporate citizens and don't deserve any lauditory comments to the contrary.  Don't forget Countrywide was nearly bankrupt last I checked.    They are doing this out of despiration, nothing more.  It is not a step in the right direction unless their greed-induced drunken stupor they happened to stumble down the right road just because what is good for the goose, here, happens to be good for the gander.  When that changes, so will their tune, I promise you.

It is a PR thing that is going on.  I fully agree with you assessment.  It is going to get a lot worse, but hey it is election time!  The politicians are too busy getting in front of cameras.  Some are actually missing as much as 75% of the vote calls while they are out campaigning!