Thank you to Alex for his post today. Im curious to hear what your thoughts are on Short Sales being a solution to our Housing Crises.
On Jan. 4, Federal Reserve Chairman Ben Bernanke sent a letter and white paper to Congress outlining his insights and recommendations on restoring the health of the U.S. housing market. Among the key findings on current market conditions:
The white paper suggests that no single solution exists and that progress will come through "persistent and careful efforts to address a range of difficult and interdependent issues"—a position we have always stressed. Among these efforts, the paper strongly recommends incentives for alternatives to foreclosure, namely a short sale or deed-in-lieu. The white paper also emphasizes a fact we are all too aware of: foreclosures drive down property values in the surrounding area and lead to a "ripple-effect" that harms homeowners, lenders and taxpayers alike. Watch my Video Blog Post to hear more insights on the Federal Reserve's recommendations.
- Housing prices remain 33% below their early 2006 peak
- Currently, 1 in 5 mortgage holders are underwater (12 million homeowners)
- In states with the price declines (i.e. Nevada, Arizona and Florida) roughly half of all mortgage borrowers are underwater on their loans
- The number of properties currently in the foreclosure process is more than four times larger than the number of properties in REO inventory