With the announcement last week of a major Foreclosure Task Force created by the Denver City Council, the question is Will it help?
The task force has been created to try to find some solutions to problems such as abandoned property and quality of life. My presumption would be that the best solution to the after-effects of a foreclosure would be the quick turn around of the property? Wouldn't the best scenario after the fact be to re-sell the property as quickly as possible and thus get new, vested owners back into the home?
In reading through the list of task force members in an article in the Denver Business Journal (Foreclosure Task Force Named) on the 19th, I note that the task force is to "...to seek solutions to Denver's foreclosure problems". Do they mean higher wages? A bill on minimum wage is working through the state House right now. Or perhaps lower interest rates? I can't remember when 6.125% was bad money.
My worry as an agent and a consumer is that artificial government interference will work against the marketplace, and not with it.
Here is my major concession....bad money mortgages. 0% down, 105% financing and D paper loans with anything less than 20% down. Interest only for "C" borrowers and below. These are bad loans. Perhaps if the government passed legislation doing away with those loans, then the rate of foreclosure would go down and properties would not go abandoned and the quality of life would continue to increase. Predatory lending would be considerably shot in the foot as well.
Or maybe it's all a result of normal corrections in the marketplace all taking place at the same time after an economic boom that lasted well beyond its welcome are causing a short term artificial incline in the rate of foreclosures?
My opinions on the market aside (I still think 2007 and 2008 shape up to be solid years for real estate) I will say that If the available loan products were limited the rate of foreclosures would go down. However there would be the potential that the rate of home ownership might go down as well. Is the City Council ready to go that route? Can they? I can't wait to see what the report from the work group is in a few weeks.
Late follow up - Headline from Inman News - Governor suspends Chicago anti-predatory-lending program
Study found sales in affected neighborhoods down by nearly half
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