I saw that, degen. Glad they mentioned, if briefly, how many of the foreclosure "victims" gamed the system. They got lots of money back and free rent while waiting for foreclosure to happen. Wish they'd mentioned that the drop in prices you hear about is actually much, much worse than stats let on, because of three huge numbers not in the sales prices: money invested in fixing up the house, incentives given back to the buyer, and closing costs traditionally picked up by the buyer, now on the seller's tab.
Here's the newest gaming-the-system ploy: max out your home equity; buy a second home (for not much money, with prices dropping), THEN let your first home go into foreclosure. Your credit gets shot, but because you already bought a new home it doesn't matter much.
Politicians are scrambling to help foreclosure "victims." You and I are the victims. There are two kinds of people getting foreclosed on: smart ones who gamed they system and made tons of money, and dumb ones who got completely played. So we can reward con artists and idiots with bailouts funded by the responsible and tax-paying, or we can let the shit sort itself out.
Do they still have that billboard off the 15 in Vegas, homes for sale, no money down, no closing costs, no payments for a year?
There is one real solution to the foreclosure mess: a law mandating that all foreclosed properties be sold within 30 days. The problem is empty houses deteriorating, attracting crime, and killing whole subdivisions. Banks don't want to sell at the market price because that price is so low. Until a foreclosed house is sold, a bank doesn't really have to admit how much it lost on the deal. So the reject an auction's highest bid.  |