The Changing Face of Foreclosures

Interest rates for a 30 year mortgage are the lowest they have been in decades. Yet, stress among homeowners continues.  Obama has tried to help out these homeowners by creating a program to change the payment plans on some their loans. However, banks are unwilling to alter loans because they fear this will cause more people to come forward claiming to be unable to pay their loan and asking for changes as well. Still, for the few loans that were changed as a result of Obama's program, homeowners are still having trouble making the payments.

Plus, foreclosures are effecting people in large metropolitan areas such as Seattle, Chicago, and Houston. These are not areas typically associated with foreclosures.

Holding Banks Accountable

Interview with Peter Swire, law professor at Ohio State University:
Peter Swire says that a way to hold banks more accountable so a bailout is not needed again in the future is to have top officials in banks sign their names to say that they have the system back under control and operating smoothly. The idea is that if they have them personally certify the banks operations, they will be more diligent to see that the bank is operating appropriately.

(What would the penalty be if an official signed their name and did not have the banking under control for their company? They're needs to be a harsh penalty to for this to work.)

Foreclosure Mess

Gist: President Obama will not pass a bill that both the House and the Senate passed. It is a bill that would require state courts to recognize foreclosure documents that were notarized in other states. This would make it harder to challenge foreclosures when the documents were put together out of state--as they often are.

Furthermore, more than half of the mortgages in this country are in an electronic tracking system called MERS (Mortgage Eletronic Registration System). It was set up by banks who wanted to be able to trade mortgages more easily. MERS' role in the foreclosure process is now in doubt. The legal system will be tested on whether MERS has the authority to foreclose on a home, or not.

Mortgage Companies Review Foreclosures

According to realty market, a research firm, 1 of every 4 houses sold in the 2nd quarter of this year is in some stage of the foreclosure process. J.P. Morgan is stopping the foreclosure process on 50,000 homes to check on paperwork. They say employees may have signed documents that they were not authorized to sign. Other mortgage companies are doing this as well. The review should only take a few weeks and most likely, any errors that may be found will be minor and no one will get their homes back if they were foreclosed on.

(Depending on how long this actually takes and how many mortgage companies do this, could this make the recovery of the property market to take longer than necessary?)

The Econonmic Behind The Figures of Construction

Gist: The Commerce Department said that the housing starts were up 10.5 % in August. However, the single family building market somehow doesn’t show very good figures. Builders suffered as the government's home buyer tax credit expired, and people curtailed house-hunting. They seem to be trickling back into the market now, but very slowly. Economist Chris Christopher at IHS Global Insight said that housing often leads the way out of a recession. In fact, construction jobs have actually fallen 10%. The remaining recession helps explain that why the apartment construction is up because there are many people move out their home and into rental apartment. People are not able to pay the property loan. In addition, construction of apartment can also satisfy the demand for young people who is looking for a job and the retiring personnel.