A Turnaround In The Housing Market?

What a simplistic method, Michael. Accursed common sense!

Still, let me suggest that just as we've had a jobless recovery in the markets since January, the housing "market" could improve by virtue of Goldman Sachs bigwigs buying really expensive houses that have been on the market for awhile. While the poor suckers at the bottom get turned out on the streets, the builders and sellers of high end real estate could still do well. Just as we have avidly pursued an increasing wealth gap, perhaps now we're seeing a housing gap that makes the numbers look good on Wall Street, but not on Main Street.

What concerns me in this numbers game is the purchase of foreclosed homes. They are bought at bargain-basement prices with the lowest mortgage rates on record. Are these buyers first-timers and if so where did they get the 10% cash down payments? Or, are they speculators keeping the homes empty until flipped when the housing market rebounds? If its mostly the latter, we have a misleading market indicator signifying nothing.

Here's an example of how insane the foreclosure practice is carried out by at least one bank. A friend bought a new house for $850,000 and a year later negotiated a second mortgage. When the housing market collapsed the house was worth less than the mortgages. The bank refused to re-negotiate the interest rates and after six months the owner stopped making mortgage payments. The house went into foreclosure and was auctioned at $250,000. Had the bank re-negotiated, it would have been a better investment than the paper loss it ate.

jkremmers-I have an ex-friend that pulled a stunt like that too. I say ex because I found it so offensive that I could no longer look at him. When the price fell 20% under the mortgage he walked away. Problem is that he signed up for it, that is the home price that he negotiated. He got a bad deal but that is the root of capitalism. Walking away from a mortgage that you agreed to (and can afford to pay if payments are going up and you are running out of money I feel some compassion) is unacceptable.

This person basically just did what we are all bitching about the banks for, they socialized the loss with no intent of socializing any profits. It's like we have become a nation of Donald Trumps rolling around in money that they should not have due to sinking all of their losses into public coffers/bankruptcy and their fellow consumers. They bought an 850k home at a time I would guess that they thought the price would rise, did they intend to give everyone in america a penny if they made a profit? If not its theft in my opinion.

Maybe I am just jealous, I do not own a home. I rent, I rent specifically because I can't afford to buy a home. I see many people living on less getting homes and driving up prices and making it even less likely that I will ever own a home in this country, at least south americas cheap.

It drives me nuts that in mass, our society has decided that socializing losses and paying as little in taxes as possible is the way to act like civilized human beings. Who needs to help or speak to our neighbors when we can just stick them with a bill and a further pricing decline in their own home now that yours is also on the market, and then as the nation takes on the losses from the banks we tack that onto the national debt. Every person that does this big or small is taxing every person in this nation just a little bit more, its like global warming for the economy. I am sorry but we live in a shared environment financially and ecologically with finite resources and infinite desires and if we do not act responsibly for our neighbors they will stop as well and you will see...well what we are seeing now and the outlook is grim.

Here in Houston the housing market never got as bad as other places owing in large part to the relatively reasonable real estate prices to begin with. The main thing seemingly holding back a real increase would be the resumption of past lending practices. Now banks check to see if you can afford the mortgage, want down payment, ect. Not bad things from my view point.

When the price fell 20% under the mortgage he walked away. Problem is that he signed up for it, that is the home price that he negotiated. He got a bad deal but that is the root of capitalism. Walking away from a mortgage that you agreed to (and can afford to pay if payments are going up and you are running out of money I feel some compassion) is unacceptable.

Why is it unacceptable? It's what our financial elites do all the time. How many time has Trump gone bankrupt? How many executives drove their companies into the ground and walked away with millions? How many banksters running banks have been bailed out by the US tax payer have gotten bonuses this year?

Why should Joe Six-Pack not play by the same rules?

What is good for the goose is good for the gander.

When it was done by the elites it was slowly destroying our country, now that everyone is doing it that destruction just comes much faster.

In addition to the losers who are simply walking away from their commitment (and their shattered dreams of easy money for next to nothing, in so many cases), there are the lowlifes who often are vandalizing the homes before they leave.

We know where these people should be housed for a suitable period now, even if it's a difficult expense for states to pay for, or even have the spare room to house (store) such people.

This whole stimulus package is just part of the governments long term plan to take away the power of the people. Are we going to do something about it or be lazy and think someone else is going to do it for us? It is time for a revolution. We need to overthrow the government and take our power back. Before there is nothing we can do about it. you should check http://www.obamamortgagerelief.org/