Showing posts with label foreclosure crisis. Show all posts
Showing posts with label foreclosure crisis. Show all posts
Wednesday, February 18, 2009
A Fourth Crazy Bad Mortgage Scenario
Moratorium on Foreclosures for one year, to be extended if necessary based on events on the ground.
Sunday, February 15, 2009
Two Bad Mortgage Scenarios
Case Study in the Market for Homes with Bad Mortgages
Link to BW "How Banks are Worsening the Forclosure Crisis"
P 1:
Home owners in bad mortgages don't deserve to be rescued.
Then,
a. let the banks foreclose, and the sooner the better. Homeowners take their earnings assuming they have jobs and rent until they reestablish credit to purchase another home.
b. new prospects need to be found to take foreclosed homes off the market.
c. work is created for realtors, movers and people who clean up and fix homes (and credit) for resale.
P 2:
Plenty of people with money will come forward to purchase these homes at the right price.
Then,
a. the market will be readjusted asap. This is the best case.
b. many homes remain vacant and neighborhoods deteriorate.
c. homes are leased/rented at market and neighborhoods deteriorate at a slightly reduced rate.
Compare Alternative Case A
P 1 Saving the homeowner is necessary condition for economic recovery.
Then,
a. bankruptcy courts readjust mortgages to a reasonable market rate.
b. mortgage holders do so on their own initiative.
c. market will be readjusted asap.
Alternative B
Homeowners walk.
White knight purchases homes at short sale and resell/release to the original homeowner.
See P 2, above.
Link to BW "How Banks are Worsening the Forclosure Crisis"
P 1:
Home owners in bad mortgages don't deserve to be rescued.
Then,
a. let the banks foreclose, and the sooner the better. Homeowners take their earnings assuming they have jobs and rent until they reestablish credit to purchase another home.
b. new prospects need to be found to take foreclosed homes off the market.
c. work is created for realtors, movers and people who clean up and fix homes (and credit) for resale.
P 2:
Plenty of people with money will come forward to purchase these homes at the right price.
Then,
a. the market will be readjusted asap. This is the best case.
b. many homes remain vacant and neighborhoods deteriorate.
c. homes are leased/rented at market and neighborhoods deteriorate at a slightly reduced rate.
Compare Alternative Case A
P 1 Saving the homeowner is necessary condition for economic recovery.
Then,
a. bankruptcy courts readjust mortgages to a reasonable market rate.
b. mortgage holders do so on their own initiative.
c. market will be readjusted asap.
Alternative B
Homeowners walk.
White knight purchases homes at short sale and resell/release to the original homeowner.
See P 2, above.
Thursday, October 30, 2008
A Workout Plan
Just for the record, here is one plan put forward by a couple of lawyerly individuals in the New York Times.
I like the community based aspect of this one. My thoughts on this are for agencies at Hud or Treasury to work with existing local-community based non-profits, such as Habitat and others, to provide funding and/or guarantees for private buyouts and lease-backs for those still able to make a reasonable, market-adjusted, mortgage or rent payment. Lease-back might not be the technically correct term; just so I'm clear, private investors, local non-profits, and not the federal government would be the purchasers; the original homeowner could stay on the mortgage, and in the home, under the new terms, or be provided a rent-to-own provision if they want.
I like the community based aspect of this one. My thoughts on this are for agencies at Hud or Treasury to work with existing local-community based non-profits, such as Habitat and others, to provide funding and/or guarantees for private buyouts and lease-backs for those still able to make a reasonable, market-adjusted, mortgage or rent payment. Lease-back might not be the technically correct term; just so I'm clear, private investors, local non-profits, and not the federal government would be the purchasers; the original homeowner could stay on the mortgage, and in the home, under the new terms, or be provided a rent-to-own provision if they want.
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