Foreclosure Resolution Blog

Despite the fact that it’s called the “Foreclosure Prevention” Act, a significant amount of money will not help anyone to avoid foreclosure. When the amount of funds in the bill earmarked for cities to purchase and rehabilitate foreclosed homes came into question, Barney Frank snapped, “The notion that this bill doesn’t keep people out of foreclosure is true… What it does is go to the aid of cities that have been victimized.”

If we’re going to try to compensate everyone and everything who’s been “victimized” by this foreclosure crisis, where do we begin… and where do we stop?

Let’s see… homeowners who bought, renters who were unable to buy because housing prices outstripped affordability, mortgage originators who closed their doors, mortgage servicers who were forced to do more with less, pension funds, pension fund beneficiaries, mutual funds, mutual fund shareholders, bank and mortgage company shareholders, private mortgage insurers, MBS investors, CDO holders, villages, cities, counties and other municipalities, potential homebuyers who are creditworthy by yesterday’s standards but can’t get a loan today, current homeowners who’ve seen their equity evaporate, homeowners who’ve had their HELOC’s frozen…

I’ve only scratched the surface here.

Maybe I’m confused. I thought that a bill named, “The American Housing Rescue and Foreclosure Prevention Act” might have foreclosure prevention as its sole focus, not pork-barrel spending.

Rather than trying to find new homeowners to fill these spaces, wouldn’t it make more sense to help the people who’ve already proven that they want to live there to keep them?

Here’s what I want to know: Who in hell is going to buy these fixed-up houses? And who’s going to loan them the money? Lending standards are growing tighter by the day. And as prices continue to decline in the inner cities, will the cities incur additional losses, or just the play money they’ve been given by the feds?

The federal government was the driving force in creating the housing bubble (with a lot of help from plenty of sources). They helped get us into this mess, but I seriously doubt that they’re going to lead the way out of it.

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This entry was posted on Saturday, July 19th, 2008 at 3:14 am and is filed under Avoid Foreclosure, foreclosure legislation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.