Is the American Foreclosure Crisis for Real?

There is another crisis looming that will dwarf the housing crash. It's the demographic crisis set to commence in 2012 to 2025. That's when the number of 45 - 54 year olds, the big spenders, is set to shrink instead of rising as it's done for decades. When these numbers are rising the economy expands. When this age group shinks, the economy contracts. It's the best economic predictor. For details visit http://thegreatbustahead.com read the article and listen to the interview of Dan Arnold. And t

The American Foreclosure issue has nothing to do with real estate cycles and everything to do with bad mortgages. Fannie and Freddie lowered the requirements for getting a mortgage to one step above breathing and a pulse. People who never should have had a mortgage were approved only to see things like insurance and property taxes skyrocket on them to the point that they could not keep up. Meanwhile add in the artificially inflated property values and you have the cause of this whole mess.

People don't fully appreciate real estate cycles and what drives them. No body ever buys property without being able to finance it in some manner and there's always a cost either at the front end or through out the term. If give you something they will want something back and they will have calculated the cost into what they offer.
The last thing that lenders want is to take back property that they hold loans on fro 20 cents on the dollar. They want the mortgagee to keep paying. So if possible t

I'm from Canada. Our lenders are more conservative here and they would never have qualified these kind of borrowers.
The worst situation is when the mortgage becomes worth more than the appraised value of the property. In 1984 people walked away their homes en mass. It affects your credit depending on where you live. A better solution is to finance homes with HELOCS. the borrower has much more control of the loan. Mortgages use compounded interest calculations and lenders profit by doing this.

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can you email me, I have some great news for you all. both for the residential and business,side of it all
Robert
see
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Tim you are right that there is quite a bit of blame to go around, but remember most people when they buy a home will listen to what the "seller" says is in that contract. They truly did not realize the ramifications of having an ARM. They figured the payments would go up a bit, not by the hundreds the are rising in some cases. After all for most home buyers the ins and outs of real estate law and economics escapes them.

The area of Florida I moved from last year has an extremely inflated re

The problem with the housing market is the craze that started a few years ago called flipping. This caused the price of properties to skyrocket and every Tom, Dick, and Harry was flipping property to make money.

I also think the financial institutions have a part to blame. If you remember the collapse of the savings and loan banks many years ago. At that time it was the same situation. Banks lending money to people that normally would be considered high risk. They got burned for that and went

There is a shortage of affordable housing period. And the mortgage issue could affect rental homes also if the landlord cannot keep up with the payments than not only will the landlord be out of a property, but the tenant could also end up homeless through no fault of their own

Agree that it's the lenders who are causing the problem - they certainly do
give loans to those who obviously won't be able to keep up.
It has to be greed - after all, the lenders don't lose in the end, they just hold
mortgagee auctions, and as long as they get what they're owed, who cares
if there's anything left over for the poor ex-homebuyer.

And as to where they are going to live - back to rental homes, I guess, if
they can find one. Here there is a desperate shortage of affordabl

I just heard on today's newscast that here in Michigan, we are in the top five across the country to have the highest foreclosures (1 in 33 homes). My question is this: where are all these homeless individuals going to go?

Part of this whole problem is the lenders who were willing to give loans to anyone who passed the "breath on a mirror" test. If you were breathing you could get a loan, no matter how high of a credit risk you were.

This is happening in Australia too. As the interest rates rise, so do the
mortgage repayments.

It's wise to factor in for a rate rise when you are considering buying a
home, and to allow yourself some spare cash to cover emergencies.
If you can, of course; it's very difficult for some to manage on their salary.

Banks are making record profits here, so they certainly aren't losing
on the deals they make!

If you do get into trouble with your mortgage, or any repayments,

It is an important subject. Especially letting people know that there are options. Thew mortgage companies ultimately lose money when they foreclose! As long as you aren't too far behind they are willing to work with you.

Bravo on your choice to highlight this very important issue, Cheryl! :)

I touched on this issue very early in my own Apsense blogs, and recieved absolutely no response at all...

The same thing is happening out there in the real world... NOBODY wants to face such a dire issue, and yet it is affecting both American homeowners and businesses all over the world...

The surest indication of a real crisis is that unbelievable silence... Sort of like the silence that comes before all major