18.1 Million Vacant Homes in America

[Dr. Who]

"Underwater homeowners have been one of the largest suffering groups in the financial crisis, with more than 8-million homes being foreclosed since the real estate market crashed. Real estate economists estimate as many as 6-million additional homeowners could be foreclosed as a result of tough economic times and the financial crisis. The effect has been disastrous for millions of families trying to stay in their homes."
http://www.moneyjournal.com/vacant-us-homes-drop-to-18-1-million/

The banksters have essentially walked away from these homes, while their original occupants may have joined the ranks of the 3.5 million homeless in the country. Apparently the banks would rather let foreclosed houses fall to wrack and ruin, than let the owners stay and at least maintain them.

[zelmo1234]

I think that there is some major room for adjustment on this, many of these homes are sold for far less that the original home owner would be willing to pay and could afford.

But also the vast majority of these homes are in areas that there are too many homes for the number of people now living there. Flint, Saginaw and Detroit have been destroying over a thousand homes a year and turning the areas back into green space, because there populations have moved away

This is also a side effect of the bank bailout and soft landing policy taken up by both the GWB and Obama administrations,

Housing is a mess in this country right now! Of that there can be no denying, but your idea of letting people live and maintain the homes?

When they know that they are going to loose the home, they usually do more harm that good

[Mainecoons]

The housing "recovery" is as phony as the Obama economic recovery. Basically, a few REITS bought up a bunch of houses on the cheap and created a mini-bubble that is about to disappear. Now they are finding they can't rent the places out and they're trying to sell them. Rental vacancy of the REIT properties is in the 50% range.

The latest generation, with half of them graduating college with crushing student debt and unable to find jobs, and the rest trying to live on McJobs, sure aren't going to be buying homes. Most of them are still living at home with mom and dad.

That's the reality of life in the ObamaRecovery. The rich got richer and everyone else, if they are lucky, got McJobs.

[patrickt]

I wonder how many of these "homes" were bought as investment properties to be flipped in six months and the investor was stuck? I realize the emotional appeal about the unlucky homeless folks was in the OP but I don't feel the tug of 6 million homeless working folks.

[zelmo1234]

Home sales to Developers like myself are winding down. When I started buying foreclosures in 09 We were paying about 30 cents on the dollar, knowing that we were looking at a 5 to 7 year time frame

The Rental market if you are in an area that has not been devastated by the economy has never been better, as people can't get 100% financing and the job market sucks if you are looking for high paying jobs. So while investors might not have their money back, they do have cash flow!

For those people like myself that were actually looking at the homes and not just buying on line, the repair cost were minimal or you paid absolutely nothing for the home. I had one 3 bedroom brick ranch that everything, and I do mean everything was stripped, but I paid less that 15K for the home. this was one we had to put money in but were able to actually sell at about a 50K net profit!

The biggest problem for the poor, middle class, and those that lost there homes was the policy of a soft landing. This allowed the wealthy to have the money to keep buying the deals, and kept the prices a little to high in all areas but those that had a flood of homes for the poor to take advantage!

So if you are one that thinks that the policies of this administration allowed the rich to get richer? You are right! And this was done to keep those dependent on the government, and nothing more!

[Dr. Who]

My point is why bother to foreclose when there is little chance to sell the place. An unoccupied home quickly runs down. Wouldn't it make more sense to make arrangements with the homeowner to pay what ever they can, or at least just pay the utilities and keep the place up until such time as they get back on their feet or the market changes?

[Chris]

So give it away?

[Singularity]

My point is why bother to foreclose when there is little chance to sell the place. An unoccupied home quickly runs down. Wouldn't it make more sense to make arrangements with the homeowner to pay what ever they can, or at least just pay the utilities and keep the place up until such time as they get back on their feet or the market changes?Laudable as that goal might be, I really don't think it would
be wise to encourage people to buy homes they cannot afford
and then rely on this kind of consumer protection to bail them
out. Yes, a lot of people got utterly screwed by the recession,
but a big cause of it was the government acting to encourage
homeownership on the part of people who simply have no
business committing to that kind of investment.

Reform to protect people looking to buy before they commit
from predatory investors, and to make life easier for renters
seems to me to be wiser and more practical.

[Chris]

a lot of people got utterly screwed by the recession,
but a big cause of it was the government acting to encourage
homeownership on the part of people who simply have no
business committing to that kind of investment

Exactly.


Reform to protect people

Those regulations were in place, please read The Political Implications of Ignoring Our Own Ignorance (http://www.american.com/archive/2011/december/the-political-implications-of-ignoring-our-own-ignorance):


A common post-crisis narrative is that banking was de-regulated in the Reagan-Greenspan era. Some pundits make it sound as if regulators behaved like parents who hand their teenagers the keys to the liquor cabinet, leave for the weekend, and say “Have a good time.” In fact, regulators believed that they had stronger regulations in place in 2005 than they did in the pre-Reagan era.



—Before 1980, mortgage loans held by banks were illiquid assets subject to considerable interest-rate risk. These problems were alleviated by the shift toward securitization.

—Before 1980, insolvent institutions were opaque because of book-value accounting. This problem was addressed with market-value accounting, enabling regulators to take more timely corrective action to address troubled institutions.

—Before 1980, banks had no formal capital requirements and there were no mechanisms in place to steer banks away from risky assets. This problem was addressed with the Basel capital accords (formally adopted in 1988), which incorporated a risk-weighted measure of assets to determine required minimum capital. In the 2000s, these risk weightings were altered to penalize banks that did not invest in highly rated, asset-backed securities.


Thus, it was not the intent of regulators to loosen the reins on banks. On the contrary, from the regulators' point of view, it was the environment prior to 1980 that amounted to leaving the teenagers with the keys to the liquor cabinet. The post-1980 regulatory changes were believed to be in the direction of tighter supervision and more rational controls.

[Dr. Who]

Exactly.



Those regulations were in place, please read The Political Implications of Ignoring Our Own Ignorance (http://www.american.com/archive/2011/december/the-political-implications-of-ignoring-our-own-ignorance):
Not everyone who lost their homes were financially unqualified at the time of purchase. Many of those foreclosures were simply caused by unemployment subsequent to the financial crisis and that continues to be a factor in current foreclosures. Many middle class people lost good paying jobs and have been unable to replace that employment in kind.

[Professor Peabody]

"Underwater homeowners have been one of the largest suffering groups in the financial crisis, with more than 8-million homes being foreclosed since the real estate market crashed. Real estate economists estimate as many as 6-million additional homeowners could be foreclosed as a result of tough economic times and the financial crisis. The effect has been disastrous for millions of families trying to stay in their homes."
http://www.moneyjournal.com/vacant-us-homes-drop-to-18-1-million/

The banksters have essentially walked away from these homes, while their original occupants may have joined the ranks of the 3.5 million homeless in the country. Apparently the banks would rather let foreclosed houses fall to wrack and ruin, than let the owners stay and at least maintain them.


$275 Billion Plan Seeks to Address Housing Crisis

By SHERYL GAY STOLBERG and EDMUND L. ANDREWS
Published: February 18, 2009

MESA, Ariz. — President Obama announced a plan on Wednesday to help as many as nine million American homeowners refinance their mortgages or avert foreclosure, saying that it would shore up housing prices, stabilize neighborhoods and slow a downward spiral that was “unraveling homeownership, the middle class and the American Dream itself.”

The plan, which was more ambitious and expensive than many housing analysts had expected, drew praise from consumer advocates as well as the financial industry.

It could ultimately cost taxpayers as much as $275 billion — $75 billion in direct spending to keep people in their homes and the rest in additional financial backing for the government-controlled mortgage giants, Fannie Mae and Freddie Mac.

But analysts and administration officials alike cautioned that it would not come close to halting the tidal wave of foreclosures. Nor would it provide much help to millions of homeowners who are “under water,” or holding mortgages that are bigger that the market value of their houses.

“This plan will not save every home, but it will give millions of families resigned to financial ruin a chance to rebuild,” Mr. Obama told a crowd here, in one of the communities hardest hit by the housing crisis. “It will prevent the worst consequences of this crisis from wreaking even greater havoc on the economy. And by bringing down the foreclosure rate, it will help to shore up housing prices for everyone.”

http://www.nytimes.com/2009/02/19/business/19housing.html

Saving up to nine million homes, sounds good right?


Obama's Foreclosure Prevention Efforts Criticized
by Chris Arnold




October 26, 2010 3:00 PM

The administration initially estimated the program would help 3 million to 4 million homeowners. But so far, only 500,000 people have received permanent mortgage modifications. That's far short of what's needed, given that millions more are facing foreclosure.


"The program really is a failure," says Ira Rheingold, head of the National Association of Consumer Advocates. "While the numbers may be encouraging for the loan [modifications] that are being done, so much more should have been done that wasn't done."

http://www.npr.org/templates/story/story.php?storyId=130840418

Obama's economic policies have been such a failure, I can't imagine how he got re-elected.

[Chris]

Not everyone who lost their homes were financially unqualified at the time of purchase. Many of those foreclosures were simply caused by unemployment subsequent to the financial crisis and that continues to be a factor in current foreclosures. Many middle class people lost good paying jobs and have been unable to replace that employment in kind.


The crisis was caused by government and business in cahoots.

[Peter1469]

There some individuals abusing the system as well, although government and banks were the biggest problem.

[Dr. Who]

I don't see why the government should be essentially bailing out the banks. The banks are sitting on some currently fairly worthless properties that they can't sell or even rent. Better to let the people who originally purchased them live there and preserve what's left of the value of the property - perhaps then they have a better chance of getting back on their feet and making good on the mortgage. If not, at least the property might eventually be saleable for something more than the land value.

[Peter1469]

I don't see why the government should be essentially bailing out the banks. The banks are sitting on some currently fairly worthless properties that they can't sell or even rent. Better to let the people who originally purchased them live there and preserve what's left of the value of the property - perhaps then they have a better chance of getting back on their feet and making good on the mortgage. If not, at least the property might eventually be saleable for something more than the land value.

Some banks have been doing that.

[Chris]

I don't see why the government should be essentially bailing out the banks. The banks are sitting on some currently fairly worthless properties that they can't sell or even rent. Better to let the people who originally purchased them live there and preserve what's left of the value of the property - perhaps then they have a better chance of getting back on their feet and making good on the mortgage. If not, at least the property might eventually be saleable for something more than the land value.


Because it's corrupt. Bail the banks, the banks contribute to campaigns.

[Dr. Who]

Some banks have been doing that.Pity so many others are not.

[Dr. Who]

The crisis was caused by government and business in cahoots.That's so true.

[Chris]

So reducing both would serve to reduce economic crisis. Starve the beast and kill corporate law.

[Matty]

"Underwater homeowners have been one of the largest suffering groups in the financial crisis, with more than 8-million homes being foreclosed since the real estate market crashed. Real estate economists estimate as many as 6-million additional homeowners could be foreclosed as a result of tough economic times and the financial crisis. The effect has been disastrous for millions of families trying to stay in their homes."
http://www.moneyjournal.com/vacant-us-homes-drop-to-18-1-million/

The banksters have essentially walked away from these homes, while their original occupants may have joined the ranks of the 3.5 million homeless in the country. Apparently the banks would rather let foreclosed houses fall to wrack and ruin, than let the owners stay and at least maintain them.




that's the nature of the liberal argument, always always always blame someone else,, this times it's the "Banksters" I'm quite sure the "Banksters" held guns to the homebuyers heads and forced them to sign those contracts. So now the liberals want the idiot signers of the documents to be allowed to stay in a home without paying for it. Once again, why should anyone do things the right way with liberals at yer back? huh? sneak into the country, no problem, yer a boy and want to use the girls bathroom? no problem, need a car? we trash all the used cars and give you a big assed subsidy to buy a brand new one at the taxpayers expense, need a cell phone? no problem, here have three, the taxpayer is paying for them, need food stamps? even if you could but won't work? no problem here have some.

[Dr. Who]

that's the nature of the liberal argument, always always always blame someone else,, this times it's the "Banksters" I'm quite sure the "Banksters" held guns to the homebuyers heads and forced them to sign those contracts. So now the liberals want the idiot signers of the documents to be allowed to stay in a home without paying for it. Once again, why should anyone do things the right way with liberals at yer back? huh? sneak into the country, no problem, yer a boy and want to use the girls bathroom? no problem, need a car? we trash all the used cars and give you a big assed subsidy to buy a brand new one at the taxpayers expense, need a cell phone? no problem, here have three, the taxpayer is paying for them, need food stamps? even if you could but won't work? no problem here have some.
Uh the banks have been manipulating the US economy for some time and getting bailed out by government. What part of that do you agree with or is the purpose of your comment simply to slam liberals even when one might be advocating something that is actually fiscally conservative. I'm not talking about subsidizing anyone, but it makes more fiscal sense not to cut off your nose to spite your face. If you can't possibly sell the house or rent it out, it will very soon become run down, vandalized and perhaps even burned down. Now the banks don't care, because they obtain insurance for the houses that they foreclose, so in effect the insurance companies are left holding the bag both for the mortgages and for the loss of the houses to criminal acts. That cost is transferred to everyone who buys homeowner's insurance. The banks win no matter what when the government gives them handouts to finesse mortgages, or the insurance companies foot the bill otherwise. Wouldn't it make more economic sense to leave the people in the houses to take care of them and perhaps allow people who have worked all of their lives to buy a home the dignity of a place to live and rebuild their lives and perhaps also make good on the mortgage or at the very least keep the home occupied so that it is not destroyed by vacancy or neglect? Not everyone bought into a high ratio mortgage. Some people simply lost their jobs and have had to take McJobs that don't pay enough to cover their mortgages. The rest of your post is off topic.

[Matty]

Uh the banks have been manipulating the US economy for some time and getting bailed out by government. What part of that do you agree with or is the purpose of your comment simply to slam liberals even when one might be advocating something that is actually fiscally conservative. I'm not talking about subsidizing anyone, but it makes more fiscal sense not to cut off your nose to spite your face. If you can't possibly sell the house or rent it out, it will very soon become run down, vandalized and perhaps even burned down. Now the banks don't care, because they obtain insurance for the houses that they foreclose, so in effect the insurance companies are left holding the bag both for the mortgages and for the loss of the houses to criminal acts. That cost is transferred to everyone who buys homeowner's insurance. The banks win no matter what when the government gives them handouts to finesse mortgages, or the insurance companies foot the bill otherwise. Wouldn't it make more economic sense to leave the people in the houses to take care of them and perhaps allow people who have worked all of their lives to buy a home the dignity of a place to live and rebuild their lives and perhaps also make good on the mortgage or at the very least keep the home occupied so that it is not destroyed by vacancy or neglect? Not everyone bought into a high ratio mortgage. Some people simply lost their jobs and have had to take McJobs that don't pay enough to cover their mortgages. The rest of your post is off topic.




Banks are corporations. I didn't hear you whine when obama bailed out GE and GM..

[Matty]

And no, I disagree, the rest of my post is not off topic, it illustrates how liberals want to fix everyone's problems with other people's money.

[lynn]

I live in Arizona and our unemployment is high with almost half the population between the ages of 18-64 that are unemployed. How can Obama help to keep people in their homes when our economy here is not good? Arizona were building brand new homes faster then people could buy them at the end of 2007 and these homes were 5 bedroom homes. We have many new business buildings that remain empty with many businesses only making it for 2 yrs and then they are out of business.

Rush hour traffic is no longer a problem since there are fewer cars on the road these days. I do not see it improving any time soon, especially with the new mandate next year.

[Dr. Who]

Banks are corporations. I didn't hear you whine when obama bailed out GE and GM..Really - I don't believe that I was posting on this forum at the time. I don't agree with the bailouts BTW.

[Matty]

Really - I don't believe that I was posting on this forum at the time. I don't agree with the bailouts BTW.



Then you are the exception to the liberal rule. Congratulations!

[Dr. Who]

And no, I disagree, the rest of my post is not off topic, it illustrates how liberals want to fix everyone's problems with other people's money.

But you're OK with the banks fixing their problems with your money. I think the banks should be making better fiscal decisions and not offloading their problems onto government or insurance companies and in the process throwing people onto the street where they become a government problem which you pay for.

[Chris]

Uh the banks have been manipulating the US economy for some time and getting bailed out by government.

Think you left out a book end:

Government regs and incentives ==> bankster manipulation ==> bail.


Who's going to bail the government?

[Matty]

But you're OK with the banks fixing their problems with your money. I think the banks should be making better fiscal decisions and not offloading their problems onto government or insurance companies and in the process throwing people onto the street where they become a government problem which you pay for.




Nope, I am not ok with bank bailouts, GM bailouts, GE bailouts and stupid homeowners bailouts. The Banks and the homeowners should be forced into arbitration and the taxpayers should be left out of the equation.

[zelmo1234]

My point is why bother to foreclose when there is little chance to sell the place. An unoccupied home quickly runs down. Wouldn't it make more sense to make arrangements with the homeowner to pay what ever they can, or at least just pay the utilities and keep the place up until such time as they get back on their feet or the market changes?

There are some cases that this would make sense, in others they would trash the place!

[Dr. Who]

There are some cases that this would make sense, in others they would trash the place!

That would be less likely to happen if there was a chance that the homeowner could resume payment of their mortgage at some point. Renters trash places too.

[Ivan88]

Dr. Who's suggestion makes tons of good sense.
But, the banks have to foreclose so they can get federal bailout money that is 100% of the mortgage face value.
Plus, they sell the foreclosed properties to their buddies at a cheap price.

In the mean time, the USA destroyed Libya where the people got 1000 bucks US per month and interest free loans for houses and businesses + medical care.
USA can't allow that to continue!!!

Just like in Iraq, folks got 5 cent/gallon gas and many other benefits. Well, we genius know it all democrazy gurus blasted them to death for such crimes.


My point is why bother to foreclose when there is little chance to sell the place. An unoccupied home quickly runs down. Wouldn't it make more sense to make arrangements with the homeowner to pay what ever they can, or at least just pay the utilities and keep the place up until such time as they get back on their feet or the market changes?

[zelmo1234]

That would be less likely to happen if there was a chance that the homeowner could resume payment of their mortgage at some point. Renters trash places too.

Ivan is right in that many of the mortgage backed Securities,, the Fannie and Freddie properties the bank is made hole. So for people that have cash, they do get great deals.

So the system is broken. And the laws that need to be changed are those that were designed to let poor people buy houses that they cold not afford! It is a catch 22

[Dr. Who]

Ivan is right in that many of the mortgage backed Securities,, the Fannie and Freddie properties the bank is made hole. So for people that have cash, they do get great deals.

So the system is broken. And the laws that need to be changed are those that were designed to let poor people buy houses that they cold not afford! It is a catch 22

I'll grant you many people were essentially lured into ridiculously high ratio mortgages which should never have been allowed to begin with. That is a reflection of a society that believes they should have steak on a hamburger budget. Nevertheless, there have also been people who lost homes that they could afford, but lost them due to unemployment.

(I still recall watching those reality tv programs with 20 something couples looking to buy houses that were anything but starter homes and complaining the rooms weren't large enough or that they would have to completely redo the kitchen because it wasn't wall to wall granite. So much for delayed gratification. It certainly came back to bite them.)

[Taxcutter]

If homes sit vacant for more than eighteen months, you may as well bulldoze them. I'd bet a lot of them have already been stripped of wiring and copper pipes.

[Dr. Who]

If homes sit vacant for more than eighteen months, you may as well bulldoze them. I'd bet a lot of them have already been stripped of wiring and copper pipes.Exactly. How is it worse to have someone who has a vested interest in maintaining the home living there?