Recent headlines and talking head pontifications lead the public to believe that most of today's problem loans center around vacant homes from the "investor" frenzy of 2004-2006. Furthermore the government "fix" seems focused upon buying up foreclosed homes. I have some thoughts on this situation.
Here in SW Florida, a growing percentage of foreclosures are for homestead property. Is it just me, or do banks seem to go after homesteads faster than vacant homes? Maybe there is a logic there, but it escapes me. It also seems to escape our Congress Men and Women. It seems to me that if Fannie Mae and others buy up foreclosed homes, then banks will simply do more foreclosures. And put more owner occupants out on the street. Now, it also seems to me that we have spent just about enough money bailing out banks.
Cape Coral Real Estate has a lot of empty homes of all descriptions and backgrounds. It is true that getting them off the market would be a help. BUT, just because a government agency buys them up, are they really off the market? Ever see a collection of HUD homes? No matter what the government agency does, they always seem to come back on the market in worse shape than the rest of the neighborhood.
Personally, I think that a more constructive program would be to spend some money to reconstruct homestead financing and get those occupied properties stabilized. Then utilize some additional funds to subsidize FHA loans for homes up to the current FHA limits. The problem right now is that many good credit people still can't get a bank loan over $150,000. Can't sell many homes if financing is not there.
Anybody in the mortgage business or anybody else have some thoughts on this?