Does Anybody Have A Clue?

By
Real Estate Agent with ERA Queen City Realty

I have been saying for months that all of the foreclosures are not due to the mortgage meltdown. There are far more homeowners who have had their homes for nearly fifteen years who have fallen victim to the economy.

Companies are downsizing if not going out of business and that has a direct impact on one's ability to meet financial obligations. The New York Times article Spending Stalls and Businesses Slash U.S. Jobs provides a perfect illustration of what is happening. Over the last two weeks Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines have announced plans to layoff employees. The financial industry is reported to have been cutting jobs since last summer, with another 300,000 to be potentially lost.

Many of these people have played by the rules and in some cases their may be a severance package and unemployment. The problem is that the unemployment benefits are limted and don't cover much of what it costs to live day to day and severance packages will run out, before many of these people are gainfully employed.

This is a national catastrophe and the cry for attention has gone unheard, until now. There may be an opportunity for homeowners facing foreclosure to realize a chance to save their home. Sheila Bair, the chairwoman of the Federal Deposit Insurance Corporation, confirmed that the F.D.I.C. is working with the Treasury to streamline the reworking of troubled mortgages, as reported in The New York Times article Help for Homeowners, at Last?

The aim is to make the loans affordable over the long term so that borrowers can avoid foreclosure and keep their homes.

Though details of the plan are not yet worked out, the outline calls for creating standardized criteria that would be used by mortgage servicers, the firms that handle collection and foreclosure proceedings for lenders and mortgage investors. Loans modified under the criteria would be eligible for a federal guarantee that would protect lenders and investors against default.

Ms. Bair comes with the experience of streamlining 60,000 IndyMac loans last summer. One can only hope and implore our representatives on capitol hill to provide a more comprehensive program to include those beyond the confines of sub-prime loans. For the sub-prime loans have given way to major layoffs nation wide throughout all industries, thereby jeopardizing many American's ability to pay their mortgage. Perhap Ms. Bair has a clue about what is needed.

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Ambassador
1,106,302
Jim Crawford
RE/MAX Paramount Properties - Atlanta, GA
Jim Crawford Atlanta Realtor - Atlanta Real Estate

The problem is that most persons do not have a budget.  They wing it all the way to hell. 

Oct 26, 2008 09:04 AM #1
Rainer
143,940
Christina Williams. REALTOR® TN property search & local insights
First Realty Company - Crossville, TN

Smart and educational information here.

Oct 26, 2008 09:21 AM #2
Rainmaker
204,745
Pat Tasker
Shorewest Realtors - Germantown, WI
Your Milwaukee Metro Area Agent (WI)

I think the big problem is a result of SEVERAL different things....bad terms that have adjusted, and borrowers now can't afford the payment, economic changes that cost people their jobs and they cannot pay their payments, and too many buyers who were really over the edge, living on the edge and have hit a glich and are now unable to pay-I just sold a foreclosure, prior owner was a "junk broker" who put many people in this position, and he himself no longer has all that business and he lost HIS home....sad but true

Oct 26, 2008 09:31 AM #3
Rainmaker
591,126
William J. Archambault, Jr.
The Real Estate Investment Institute - Houston, TX

"I have been saying for months that all of the foreclosures are not due to the mortgage meltdown."

Very insightful! Never before has it been respectful to lose your home, but today it's PC to be a victim.

No one is investigating the reasons for so many foreclosures, the politician's aren't concerned with curring the foreclosure problem, just avoiding their own guilt and buying our votes!

Bill

Oct 26, 2008 09:35 AM #4
Rainmaker
414,190
Jen Bowman
Keller Williams Realty - Holmes Beach, FL
Realtor - Anna Maria Island & Bradenton FL

The foreclosures are not just due to the mortgage meltdown.  I have a client who is facing foreclosure after paying on her home for 10 years!  She had a normal 30 year fixed rate mortgage.  She lost her job that she had been at close to 20 years. She is over 55, I'm not sure by how much, but she has struggled to find a job.  She was with a big telecom company and doing technical things.  She is having problems getting hired because 1, she is older and could be close to retirement (in an employer's eyes), and 2 she has been told is overeducated and over experienced for the jobs she is trying to get.   She is a wonderful lady with a wonderful personality.  I have suggested she leave off her education and downplay her experience just to get a job somewhere.  It is a shame.

Oct 26, 2008 09:42 AM #5
Rainmaker
76,119
Randall Schrader
Competitive Insurance of Dundee - Dundee, FL

PC to be a victim!  Good one William and I agree.  With the election so close, it's the voting victims that should be 100% innocent.  Free houses for all that were tricked into mortgages.

Oct 26, 2008 09:53 AM #6
Rainmaker
1,055,550
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

There are so many aspects to this meltdown that it is difficult to completely comprehend.  However, one thing is clear, those who are the innocent ones should be given some assitance.  I don't really see these foreclosures doing a whole lot of good for the lenders or anyone else.  It is now looking like there is an worldwide economic slowdown or worse.  Hopefully the new legislature will get to work and finally work together.

Oct 27, 2008 12:32 PM #7
Rainmaker
247,746
Mike Klijanowicz
Baltimore & Harford County Maryland - RE/MAX AMERICAN DREAM - Perry Hall, MD
#1 Baltimore & Harford County Maryland REMAX Agent

I think you have an interesting point here that not many are addressing right now.  Layoffs are only going to increase and if people are not making money, things are only going to get worse!  Still, if you are looking for a home right now, this is the mix of elements that you want and makes it the PERFECT TIME TO BUY!

Oct 28, 2008 07:42 AM #8
Ambassador
1,476,165
Renée Burrows
Savvy Home Strategies Realty, LLC-REALTOR®-Estate-Probate - Las Vegas, NV
Las Vegas Real Estate Broker - www.urLVhome.com

It is a crying shame that Washington DC has, again, ignored the crux of the problem with simpleton bandaid solutions that cost so much.

Oct 29, 2008 08:06 AM #9
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William Collins

Director of Property Management
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