Current Housing Indicators |
| CURRENT | PREVIOUS | ||
| Existing Home Sales | 4.49m | ▼ | 4.74m |
| New Home Sales | 309,000 | ▼ | 344,000 |
| Housing Starts | 583,000 | ▲ | 477,000 |
| Building Permits | 547,000 | ▲ | 531,000 |
| HMI | 9 | UNCH | 9 |
| Existing Home Prices | $170,300 | ▼ (annually) | $199,800 |
| New Home Prices | $201,100 | ▼ (annually) | $232,400 |
More Videos
- Watch Foreclosures, Seriously
- Home Buyer Tax Credit Expansion Heads to Obama
- Congratulations America, We're All Landlords Now
- Wells Fargo Bets on Housing Recovery
- Home Buyer Tax Credit Done: Does it Matter?
- Better Times for Mortgage Banking
- 'Beleaguered Big Builders' Sitting On Piles of Cash
- Home Buyer Tax Credit: Final Deal?
- A Compromise on Home Buyer Tax Credit?
- Mortgage Bankers Can't Afford Their Own Home
MOST SHARED
- Solar Market Heating Back Up?
- Realty Execs See Pain Ahead
- Tommy Lee, Medical Tourism and Nasty Santa, Your Emails
- Easy Money & Stocks
- Buying Fear: How to Own Volatility
- Want the Homebuyer's Tax Credit? Here Are Some Tips
- Keith Bergelt: The Case for Market Based Patent Reform
- Maria's Market Message
- Video Game Industry's Troubles Aren't Just in US
- Tommy Lee, Medical Tourism and Nasty Santa, Your Emails
- U.S. Markets Gain 3% for the Week Despite 10.2% Unemployment
- Disney's 'Carol' Tests Widest 3-D Release Ever
- Stimulus II? Jobs Tax Credit=Cash For Clunkers
- Rockwell Automation Earnings: What Options Are Saying
- Gold Will Touch Higher Lows and Higher Highs: Analyst
- Is Misery Alive And Well in Your Office?
- Consumers Haven't Changed, They Are Just Pickier
- Watch Foreclosures, Seriously
- Week Ahead: Stocks Search for Catalyst in Quiet Week
- Outlook: Dollar Likely to Ride Higher on Bleak Jobs Report
- Health Bill Clears First Hurdle in House
- Buffett's Berkshire Hathaway Says Net Income Tripled
- Cramer: Earnings, IPOs Dominate Next Week
- Buying Fear: How to Own Volatility
- Administration Rejects Plan to Buy Fannie Mae Credits
- Consumers Haven't Changed —They Just Got Pickier
- Want the Homebuyer's Tax Credit? Here Are Some Tips
RSS FEED
Realty Check
Text Size 
I’m all about the hope, awash in it in fact, and no, I’m not being facetious. How could any American, even those of the non-winning party, not feel some sense of positive change, despite the fact that our president-elect, in accepting his new job, tried to manage expectations out of the gate?
But hope shouldn’t cloud reality, especially when it comes to housing.
As policymakers and economists try to wrap their collective expertise and expectations around the possibilities of the Obama presidency, a heightened sense of urgency is now focused on mortgage rescue plans and housing stimulus. That is not unexpected, but everybody take a breath. Many are rushing to get something done before the change in power, and ideas are being floated that could hurt more than they help.
I read today, on a blog, about ruminations from the CEO of Assured Guaranty Ltd [AGO
Loading...
()
], regarding a government subsidy plan for troubled borrowers. His idea is for a three-year federal subsidy that would cost $441 billion. A troubled borrower could get their mortgage fully subsidized for three years but would then have to pay it all back, with interest in five years. The idea is that five years from now they could sell the home for more than the loan or refinance at amounts that would allow repayment. Isn't the teaser rate how we got into trouble in the first place??
The home builders are also out with a plan to stimulate housing. They want first a home-buyer tax credit of $10-20,000 available to all home buyers that would not have to be repaid. On top of that they want the government to subsidize a below-market rate 30-year fixed rate loan—2.99 percent! For homes purchased through June 30, 2009. The interest rate would increase to 3.99 percent for homes bought in the second half of 2009.
Then there is the FDIC’s Sheila Bair, still pushing with the Treasury for her agency to guarantee mortgages in exchange for lenders and servicers to modify loans and/or write down principal.
The concern now is that with all these plans, homeowners, some in trouble and some not, are beginning to think it might be a good idea to stop paying their mortgages. Why not? If there are so many ways to take advantage of the government and the lenders, why be left out of the party?
A reader wrote into the blog, telling of how he lives on an upper middle-class cul de sac in Plano, TX, and how several of his neighbors are now saying they are going to stop payment on their loans. None of the neighbors are in any particular financial trouble.
"I think everyone is going to be very surprised when the data demonstrates how many foreclosures are voluntary walkaways due to price declines. Having a 60 day DQ on your credit file in return for getting a chance to negotiate a large reduction in principal balance as well as better interest rate is a risk/reward that is going to appeal to many, many homeowners."
I would just caution all those getting ready or already taking part in the winds of change to batten down the hatches. Fixing the housing crisis is going to be a long and painful task with no easy fixes. Giving some homeowners a free ride is not the answer, now matter how much we all hope for a quick resolution.
Questions? Comments?
Data is a real-time snapshot *Data is delayed at least 15 minutes