Obama's New Foreclosure Plan Gets Mixed Reviews
Obama's New Foreclosure Plan Gets Mixed Reviews
March 27, 2010, TIME
Reaction is mixed to President Obama’s plan to prevent up to 4 million homeowners whose mortgages are underwater from defaulting on their loans over the next three years.
Underwater' Rescues
March 27, 2010, Los Angeles Times (Editorial)
Federal, state and local governments have launched initiative after initiative to save borrowers from foreclosure, leading many Americans to ask why some people should be rescued from the bad bets they made on the housing market while more cautious home buyers were left to absorb the full brunt of the collapse. The question is sure to be raised again in response to Friday’s announcement that the Obama administration will push lenders to reduce the amount that people owe on homes whose values have fallen to less than the amount of their mortgages. It's easy to defend the rescues when they're premised on voluntary decisions by banks to cut their losses. It's more problematic to justify using tax dollars to persuade lenders to do something they should be doing anyway.
Above Water?
March 28, 2010, Washington Post
Despite recent, tentative signs of stabilization, the housing market remains fragile, and that translates into insecurity or outright hardship for millions of Americans. Twenty-four percent of all homeowners with mortgages are "underwater," meaning that they owe more on the residence than it is worth. For those borrowers who are unemployed, this situation is especially devastating: They can't tap equity to deal with expenses, and they often can't sell if a job offer requires them to move. In many cases, it's cheaper to walk away and let the bank foreclose than to keep up monthly payments.
Don't Foreclose! Do a Short Sale
March 29, 2010, CNNMoney.com
Short sales are the hottest thing going in the distressed-property market, and the trend is expected to get even hotter in coming weeks, when the government starts handing out cash to encourage lenders to close these deals. These transactions, where lenders allow homeowners to sell their houses for less than they owe, accounted for 17% of all residential real estate sales in February, up from nearly 13% in November, according to a monthly real estate market survey by Campbell/Inside Mortgage Finance.
Waiting for the Other Shoe to Drop
March 25, 2010, The Economist
In its early days, the Obama administration argued over whether the financial system or the real economy should be the economic priority. Critics disputed the premise. They argued that no lasting recovery would be possible until housing markets were healthier.