Tag Archives: Global Real Estate

Do Governmental Housing Programs Work?

This is in reference specifically to the programs as of late that have tried to keep people in their homes through loan modification. This is a question I and many others have been asking and trying to figure out for some time now.

While I attempt to be eternally optimistic, numbers usually don’t lie (if they are presented honestly – ha ha).  Seriously though, I am an avid reader of anything Mish writes and he nailed it on the head here –

Statistical Nonsense On “Help”

For the 40% that end up defaulting anyway, how much money, time and mental energy did they waste in these programs? Assuming the other 60% keep their houses I have to ask “Who was it that was really helped? The bank or the home owner?”

I suggest in most instances if anyone was “helped” it was the lender. It is no favor to make someone a debt slave forever in these programs. Finally, one must look at other costs.

For example, how many people stopped paying their mortgages just to get “help”? Also note that the sooner housing prices bottom, the better off everyone will be. These programs harm price disclosure, help to keep prices elevated, and thus curtail genuine demand.

From these perspectives, HAMP and the entire gamut of “help” programs has done anything but help. Speaking of government help programs, please consider the Mission Statement of Fannie Mae.

We are a shareholder-owned company with a public mission. We exist to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market.

A quick check now shows the link I had with that mission statement has been redirected to About Fannie Mae

The link now states “Fannie Mae is a government-sponsored enterprise (GSE) chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets.”

Fannie Mae clearly failed its mission to provide stability and affordability to housing. The truth is no government program ever provides stability or affordability. HAMP won’t either, and the truth should be easy to see.

You can find the full article here

Enjoy,

Keith Klassen – Real Estate Broker

916.669.9030


Have we hit bottom in the Sacramento CA housing Market?

This is a question I get asked frequently and one that I hear attempting to be answered.  “Have we hit the bottom of the housing market?  At times I have fallen prey to the common thinking that says, “How much worse can it get?  The market has dropped ____%, how much more can it go down?”  Then the conclusion… “We must be at the bottom.”  Anyone with their head in the game has thought/asked this.

However, after just doing a little research you will find that there are key economic forces in play that have to change (unemployment for one) before “the bottom” is reached AND our economy comes out of the recession in which we find ourselves.  Forecasters have been calling the bottom for the last 2 years or longer.  So have we hit bottom yet?

For an excellent read on some of these economic factors, check out this article, The Orwellian Recovery.  The author succinctly states,  “I don’t see how housing prices can recover at the same time inventories, mortgage rates, and unemployment rise.”

A colleague an I were discussing this topic over coffee today… what’s going to happen when the government backs off the stimulus and interest rates rise?

It’s a complicated and highly opinionated topic, what are your thoughts?

Enjoy,

Keith Klassen – Real Estate Broker

916.669.9030

Cheap Foreclosures Around the World

I came across an interesting article on AP news regarding an entire town in Latvia being sold at auction for $3.1.  Check it out here