In the case of president Obama they are stopping foreclosure in all 57 states.
How would you like to get up tomorrow and not have a mortgage payment? I’m sure many people would. How would you like the security of a home that is free and clear? About one third of the population of the United States owns their homes free and clear and that means no mortgage payment. There are many other Americans that will get up tomorrow and not make a mortgage payment. These people are in a totally different camp all together. They do not have a mortgage payment right now, however, these people do not have the security of staying in their homes long term either. It’s a terrible position to be in. I personally know some people that have been in their homes not making a payment for almost 2 years now! With this freeze on foreclosures by several large institutions who knows how much longer this will go on. Many believe, we need to foreclose on these non performing loans in a timely manner and get the properties on the market, and sold to new buyers that will make the payments, before the market can begin to recover. This current roadblock will only prolong the inevitable.
Just recently Fannie Mae and Freddie Mac have instructed the banks to start speeding up the foreclosure process and get rid of the shadow inventory on their books. Truth is, once the banks start certain foreclosure processes they are required to have greater and greater reserves on hand to meet those loan losses. If the banks put too many properties into foreclosure all at once they quiet simply would not have enough reserves and the Feds would have to drive up in their large black American SUV’s and cart away all their records. The free market as far as banks are concerned would be over. The banking system would have to be nationalized. There is a very fine line for the banks to keep profits positive and stock prices up so that they are stable enough put away x amount of reserves to handle x amount of foreclosed loan losses. This is why we have shadow inventory and why we are unable to get an accurate number on it. Matter of fact, do we really want to know?
This procedure error of not reading the foreclosure documents properly and signing in front of a notary will get resolved. Whether by the banks or the administration it will get resolved. The country must move forward and housing is a big key in doing that. Many people have their wealth tied up in or to their homes and values must begin to stabilize and even begin to appreciate. In the lower price ranges we have already hit the bottom and prices are moving higher. As the correction takes place, people will feel better about their nest eggs and consumer confidence will begin take off. Now is the window period to become a home owner for the first time or to move up!
