Posted on 10/18/2010 7:24:51 AM PDT by SeekAndFind
The fragile U.S. economy will probably sustain another blow as a result of the latest housing market crisis.
Amid allegations of wrongful evictions, lenders such as Ally Financial's GMAC, JPMorgan Chase & Co and Bank of America Corp have halted at least some of their foreclosures in process, creating a bottleneck that has the potential to restrain both bank lending and consumer spending.
The U.S. recession came to an official end in June of 2009, but it has yet to sustain a meaningful recovery, as unemployment persists above 9.5 percent.
"This creates a headwind for a more substantive recovery in housing and the economy as a whole," said economist Diane Swonk of Mesirow Financial of the slowing foreclosure pipeline.
Housing seems to be ceding the once-crucial role it played in the U.S. economy.
In the second quarter of 2010, it accounted for 15.3 percent of the country's gross domestic product, down from 18.5 percent at its peak in 2005, according to the National Association of Home Builders.
While the sector could once be counted on to lead the nation out of recessions, that too has changed, said Karl Case, co-creator of the Case-Shiller home price index.
And now all 50 U.S. states have started joint investigation of the mortgage industry
The result of all the halted foreclosures, both explicit and unofficial, is a de facto national moratorium, said Guy Cecala, publisher of Inside Mortgage Finance, an industry newsletter.
"We have the traditional holiday foreclosure moratorium coming up so if this just drags on for another month or so, it will be January" before bank repossessions start happening again, Cecala said.
Last year, mortgage finance giants Fannie Mae and Freddie Mac asked mortgage servicers, the banks who collect loan payments even if they don't own the loans, to take a breather
(Excerpt) Read more at reuters.com ...
The U.S. recession came to an official end in June of 2009, but it has yet to sustain a meaningful recovery, as unemployment persists above 9.5 percent.
Whatever idiot said the recession was over needs to be horse whipped.
Yep no doubt about it “Compassionate Conservatism” and “Hope and Change” are just “Flip” side of the same coin.
I saw a story on the Detroit news last night about a woman who bought a house in a foreclosure sale a few days ago and the city tore it down yesterday.
Just goes to show what a mess the whole situation is.
The “silver lining” in the cloud of that story is that she probably only paid about $25 for the house anyway.
No it actually looked like a decent enough house and had only been empty for two years. It needed some work but wasn’t on the verge of collapse or anything.
” Whatever idiot said the recession was over needs to be horse whipped. “
Hmmmm... If everybody (in Gummint, past and present, and in Big Banking) that needs to be horse whipped were to get his just deserts —
There would be a resurgence in the horse-whip industry that would, by itself, make a major dent in the recession...
;)
RE: a woman who bought a house in a foreclosure sale a few days ago and the city tore it down yesterday.
It would be an INJUSTICE and an OUTRAGE if the city did not pay her for the amount she spent buying the property. In fact, it SHOULD be made a national issue.
Here’s the story. Says the home was burned but the photo they showed on the news must have been prior to the fire. She paid $1000 and intended to fix it and live in it.
http://www.clickondetroit.com/news/25416926/detail.html
As if the city could afford the revenue loss of a taxpaying owner.
Woman buys foreclosed home, two days later she finds it demolished
Let's hope the tax appraiser got there in time to raise the taxes. What a deadbeat.
They’ll probably charge her for the demolition.
"Police came to the scene but could not resolve the situation."
If that woman didn't pull a permit she's in big trouble. She'll be foreclosed in a snap and end up with her wages garnished.
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