How do I do it? Is it just another demonstration of my wisdom or, possibly, just dumb luck?
Please keep your opinion to yourself.
If you didn’t read my article from the 27th of September 2010 or have forgotten it, It would be a good preface to this post. To go there click on the link to Foreclosure.
My article emphasized the benefits of my suggestions to the families facing the loss of their home. It also mentioned that the economy would recover much quicker by speeding up the recovery of the real estate market, the largest segment of the economy.
Now comes a study showing that my general suggestions also would benefit the banks, the investors, Freddie and Fannie. Freddie, Fannie and the Treasury Department have acknowledged the correctness of the conclusions of the study. It would save taxpayers a ton of money. So, let’s get on with it. Recovery, here we come.
Whoa. There’s a little snag. The player that has the ability to make this happen refuses. Who is this spoilsport? The Federal Housing Finance Agency. Obama has tried to get Edward J. DeMarco, the acting director, to go along. The problem is that the FHFA is an independent agency.
As the study shows, all of these benefits to the banks, investors, Freddie, Fannie, the Treasury and the taxpayers result from writing down the principle on houses that are under water.
Foreclosed houses sit there. Unless the mortgage holder spends money cutting the grass and maintaining the property, weathering will reduce the value of that property. It will also reduce the value of all the properties in the neighborhood.
So, if reducing the principle is the miracle solution, the banks must be rushing to cut, cut, cut. Wrong.
Another study just came out from the economists at the Federal Reserve Bank of Cleveland. It shows that the banks are seriously overpricing foreclosed homes in Ohio. You don’t think Ohio is bucking a trend, do you? They are not an outlier. If the other Federal Reserve banks replicated the Cleveland study, it is a safe bet that the results would be similar.
Just think. One person has the power to significantly speed up our economic recovery, but refuses.
If he is too simpleminded to grasp the concept, he is too simpleminded to hold that position. If he does ‘get it’ but refuses to act, he has an agenda that needs to be exposed.
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