Posted on 12/28/2011 8:28:54 PM PST by Nachum
Bank foreclosures and abandonment are causing high home vacancy levels in neighborhoods across the country. Scott Pelley travels to Cleveland, a city that’s fighting back against blight.
Chances are the home you’re in isn’t worth what it used to be. You may not have indulged in the real estate bubble with its liar’s loans and Wall Street greed, but you were stuck with the bill. Home values have dropped so far, so fast, that nearly 25 percent of mortgage holders today owe more than their house is worth.
And with unemployment so high, so long, many face foreclosure. If you thought your home value couldn’t drop any more, have a look up and down the block. You might say, “There goes the neighborhood.” The new threat from the great recession is the sudden surge in the number of abandoned houses. Vacant homes have become so ruinous to some neighborhoods that one city, Cleveland, decided it had to find a solution.
(Excerpt) Read more at ewallstreeter.com ...
Everything cycles (like prices go up and down) so a correction in RE was to be expected. What was not expected was for banks to bundle the same mortgages multiple times and sell them to investors then take the original mortgages and sell them to taxpayers via GSEs like Fakeyou and Fraudie, making taxpayers on the hook for the bundled investments.
Normally a RE bust would bring a recovery after getting rid of the excesses and bad loans, this time there is no end in sight as bad mortgage paper is more than 30 times higher, due to leverage used by banks, that has to be worked off during this recovery. Maybe by the year 2020.
The 60 minutes piece in just a misdirection play away from those most responsible.
You’re right; student loan debt is killing people today. They borrowed money in the “before-time”, and are expected to repay it at “new normal” wages - it isn’t going to happen, in many cases.
The real problem is not allowing the market to function naturally.
When the market is glutted, the values should come down in order to make the sales.
The problem is that the loan companies prefer to either hold the paper or not only take a complete loss, but pay somebody more cash to tear them down.
Meanwhile people who are looking to buy, can make offers, but in most cases their offers are beat by the homeowners attempting to refinance and the offer becomes their new market value.
What is nutty is tearing down the housing when now you have jobless and homeless people.
Usually when homes get bulldozed they are uninhabitable. The cost of bring them up to code doesn't make economic sense.
” - - - Just go along with it. “
Hmmmmmm - - - - . That goes against all that works for me. I’ve never been known to be someone who “goes along to get along.”
My question still stands unanswered. Anybody? Anybody?
Obviously, it isn’t.
I was being facetious.
I guess it wasn’t obvious enough.
There are a lot of real estate paper holders who want to tear down abandoned properties so the market values on the remaining properties are kept artificially high.
It’s a paper game. The real value is not directly attached to the real property.
That’s why they are only advertizing or selling about 1/10th of the properties with Notice of Default.
Your full of it. Nobody wants to tear down a functional piece of property unless they see a better opportunity. Investors are taking huge risks on marginal foreclosure properties. They aren't going to buy a piece of property to just tear it down...
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