Warren Michigan is typical of the real estate market in our state, hard to sell even homes coming out of foreclosure.
The Zillow website reports zero, nada, not one, house sold in the last 30 days, out of 1,852 for sale.
According to the Realty Trac site:
“One in every 387 homes in the United States was in some stage of
foreclosure last month, RealtyTrac reported Thursday. The company’s data
shows that foreclosure filings were issued on 333,837 properties in
April. While still elevated, that figure represents a 9 percent drop
from the previous month and a 2 percent decline compared to a year ago.
It’s the only month in the history oef RealtyTrac’s report where
foreclosure activity fell on an annual basis.”
There were no mortgage securitizations sold for the last 2 years, until last month.
That means, whatever mortgage market there was, it was Federal government money subsidizing the mortgages.
And the FHA covered more loans last quarter than Fannie Mae and Freddie Mac put together.
So, Uncle Sam says, let’s solve this foreclosure crisis by underwriting more bad mortgages, which fueled the crisis to begin with.
More defaults always means more foreclosures, which means more homes for sale, (I know I say this all the time!), which means ever lower home prices.
Why would private lenders get back into a market like this, buying mortgages into an ever declining housing market?
No reason, which is why they have stayed on the sidelines.
Which also prolongs the crisis, just like the government’s actions.
We have to hit bottom before we can turn around.
Foreclosures will go down, once the government gets out of the way and lets the home prices fall to market value.
At that point, it will make sense for private lenders to get back in the game.
One thing the government can do to help the foreclosure crisis, is, change Chapter 13 bankruptcy law to allow judicial mortgage modification.
Then the mortgage can be re-written by the court, and the owner can keep the house by paying what it is worth, instead of going through the expense of the foreclosure process, throwing out a taxpayer, and putting yet another home up for sale.
Housing Crisis Means More Foreclosures
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