Return of the Angry Renter


These people need an interior decorator, not a bridge loan.

At the Irvine Housing Blog, Irvine Renter kicks it old school with a straight-outta-2003 Fisking of a New York Times article on the Obama Administration's $3 billion flush down the black hole of unemployed, deep-underwater mortgage borrowers.

Unfortunately, Renter is calling out David Streitfeld, who has been among the sharpest eggs in the toolkit since the beginning of real estate's return to earth. But he manages to catch Streitfeld invoking a myth that should have been retired months ago (if nothing else thanks to, ahem, my regular coverage of it). This is the belief that foreclosures need to be prevented in order to protect surrounding neighborhoods. Renter writes:

Did you notice the subtle emotional lie perpetrated in the sentence above? Foreclosures do not weaken neighborhoods. As written, the sentence conjures up images of slums and shantytowns. The truth is that foreclosures lower prices in neighborhoods, but then employed renters move in and buy these houses and strengthen the neighborhood. Lower prices makes existing homedebtors unhappy because their dreams of home equity wealth are revealed as sad fantasies. Loan owners who surrender their dreams of HELOC riches do not weaken neighborhoods. If anything, making people focus on adding value and working for a living will strengthen neighborhoods.

I wish more people were making this point. It is offensive in the extreme to be told that by bailing out deadbeats and preventing prices from finding their natural level, the government is somehow doing a favor for the vast majority of Americans who are still making their payments on time, pumping money into a declining asset just because they pledged on their honor to do so, or, like poor Renter, living in lousy apartments while waiting for the real estate market to hit bottom.

NEXT: How To Make $2.7 Million Disappear

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  1. the black hole of unemployed, deep-underwater mortgage borrowers


    1. Give 'em a break. They are being edgy with the mixed race couple.

      1. Anybody else notice that whenever couples discuss finances, it has to be at the kitchen table?

        1. Usually in the hot tub!

        2. My wife and I usually discuss finances in the shower.

        3. In my house, it's typically over the body of the passed-out hooker that I brought home so my wife and I could have a threesome.

        4. In my house, it's typically over the body of the passed-out hooker that I brought home so my wife and I could have a threesome.

          1. So nice, you did it twice!

            1. It's a sixsome!

  2. by bailing out deadbeats and preventing prices from finding their natural level, the government is somehow doing a favor for the vast majority of Americans who are still making their payments on time, pumping money into a declining asset just because they pledged on their honor to do so

    Let me be clear.

    I pledged on my honor to redistribute wealth, and so do a favor to the vast minority of Americans who do not make their payments on time.

  3. The alt-text is mistaken. They need a tactical nuke.

    1. It's the only way to be sure.

      1. Pizza King called. They want their decor back.

  4. As long as the person who is foreclosed on does not do damage to their former property before they leave. One of my neighbors was foreclosed on and they took out all of the outside lighting fixtures with them before they left. I do not know what shape the inside was in but given the shape of the outside I could imagine.

    1. That happens a lot. A lot of these people who bought these houses are scum. Yet it is somehow a tragedy they will have to rent now.

      1. Its the government's duty to step in on behalf of people who make shitty financial decisions and step on people who make good ones. Who speaks for the inept, John?

        If the market were allowed to hit bottom, why, housing prices might stabilize at a lower rate. Wages might drop slightly on some magic scale, which means revenue to the government might slip a little on some other magic scale.

        But the worst thing that could happen, though, is if people begin to think that government intervention is ineffective and wasteful. That's when the big trouble starts... nobody wants the government to lose control - it's scary.

        1. It's like that 9-11 Conspiracy episode of South Park, where everyone realizes they would prefer the government to be evil and calculating as opposed to moronic. I guess it comes down to who would you prefer to run your lives: Lex Luthor or Bizzaro? At least Lex Lutor, won't hurl into the sun by accident while playing some demented form of catch.

          1. I've heard Cuba refugees who were against Batista saying they preferred his brand of tyranny to Fidel's.

      2. Yes to the poor future landlord.

    2. We did a drive-by of a perfect (for us) house the other day where this was the exact scenario.

      The pics on the MLS site were of a nicely remodeled cape with granite countertops, new appliances, and tiled floors. We peeked into the windows since the house looked abandoned and were saddened to see that the cabinets, countertops, appliances, and flooring had all been ripped out of the house. We told the realtor, who had no idea this was the case; turns out the deadbeats played thief-in-the-night and took anything that made the house worth buying with them. **SIGH**

      We are extending our lease into next February; hopefully by then 250K will net us a decent starter home. I've stopped looking for now. It takes too much energy to prop up hope.

      1. It takes too much energy to prop up hope.

        Tell me about it.

        1. Cup the balls, Rahm. If that doesn't work, put your finger in the stink. If that doesn't work, call an intern.

      2. Now that's some scummy shit. You're destroying a perfectly good house that someone else would eventually buy.

        Actually a way to deal with this would be to have a component go into the credit rating depending on the resale value of the foreclosed property. I.e. how much of the loan was left after selling the house again?

        If you trash the property, the leftover balance would be larger, and hence negatively impact your credit score.

        Same with cars. The bank should just recover as much of the loan as possible by selling the vehicle, and the balance proprtionately impacts your credit rating.

        1. You're destroying a perfectly good house that someone else would eventually buy.

          It happens a lot. People tend to want to blame the bank for foreclosing, instead of themselves for missing the payments, so they "get even" by trashing the house.

          A while back there were stories about banks offering to make a cash reward payment to the foreclosees(?) in return for the keys to a non-trashed house.

        2. In recourse states, you still owe the bank the residual on the loan after the sale. Of course, if youve got nothin', they cant get it from you anyway.

          1. In nonrecourse states, if you violate your deed of trust by willfully damaging the security, you can still be liable for the damage. I doubt banks are trying to enforce those clauses, but if they drove a few people into bankruptcy for trashing the foreclosed house, perhaps a few people might reconsider what they are doing.

          2. Damn these people should be going to jail for vandalism not get off the hook by paying back the damage.

          3. Thank god these recourse states have laws to protect the mortgage lenders from declining house prices.

            Individual homeowners deserve no such protection.

        3. Actually, that's exactly what happens. If a house or car gets taken back by the bank, they resell it and the balance goes on your credit report till you pay it off or renegotiate.

        4. Their credit ratings are probably pretty awful already.

          Isn't vandalism illegal? But I suppose banks are too cowed by the prospect of bad publicity to go after these jerks.

      3. Which is precisely why home loans need to be full recourse. Additionally, we should have laws on the books that treat stealing parts of your forclosed home as precisely what it is: theft.

        1. Umm...theft is already a crime. They just aren't prosecuted because they are the poor underdogs sticking it to the man. And the lack of first hand proof...

        2. It's a dick thing to do, but it's not theft.

          I can sell my appliances right now if I want to and the bank that holds my mortgage can't stop me. Up until the moment the foreclosure is complete, everything in the house is mine and I can do whatever I want with all of it.

          1. Not true. YOu have a legal obligation to take care of the property as long as someone has a lien on it. That is why you have to maintain insurance. You have a legal obligation not to burn the place down and do reasonable upkeep on the collateral. It is more than a dick move, it really is theft. And it ought to be a crime.

            1. I don't think you have a legal obligation to carry insurance. The lender requires it to protect his (her) investment.

              1. Which, since you signed a contract would make it requirement enforceable in a court of law. Some might call that a legal requirement. (And other pedantic people would argue the other side.)

                BTW, I was looking into flood insurance. A house we are looking at is close to a river. And there is a requirement to carry flood insurance if you take out a loan from a federally insured financial institution on a house that is rated high risk for flooding. (In other words the feds require that you sign up for one subsidized program, flood insurance, to protect the other subsidized program, bank insurance. Ain't government grand?

          2. Not true. Fixtures and things attached to the property are part of the security, so even if you attached them, once attached, you cannot remove them without putting something equivalent back. Thus, taking your appliances as you leave the house during foreclosure is actually a breach of contract for which a bank can sue whether in a recourse or nonrecourse state.

            When you sell a house and remove fixtures by agreement with the new owner, the bank doesn't care, because the loan is getting paid by the sale.

        3. A leftist idiot suddenly concerned about theft. This should be hilarious.

    3. Reminds me of the bulldozer story from a few months ago.

      1. Was it Rachel Corrie's house?

    4. To be fair, it's entirely possible that the outside lighting fixtures were an improvement to the property that the owners had put on after buying the house.

      I've seem plenty of those fancy little torch lights around, on walkways and external walls. They do look great, and it's entirely likely that a newly built home won't have them.

    5. I've looked at many foreclosures (and bought a few) and it is more common than not that the losing owner takes stuff (appliances, etc) from the house before leaving. One guy even took the electrical wall sockets! It is very common to see stuff like brick walls that have been spray painted and other malicious vandalism.

      If there is one thing that has screwed up real estate, it is short sales. Before Obama, those short sales would have been foreclosures and would have been expeditiously transacted. Now, these short sales can take forever to happen (or not happen) and introduce a tremendous amount of uncertainty.

      These politicians from both sides all want to delay economic pain from happening on their watch, even if the slightly longer term economic results are worse as a result of the politicians' incompetent meddling.

      1. Probably the biggest inducement to people abandoning houses (other than shear inability to pay for them) is that Congress passed a statute granting a tax holiday for forgiven debt on foreclosure. Thus, instead of paying taxes on the $100,000 the bank ate, a person now can walk scot free.

        That is a large incentive to walk, especially since that tax free window closes in another year or two (at least theoretically).

  5. "We peeked into the windows since the house looked abandoned and were saddened to see that the cabinets, countertops, appliances, and flooring had all been ripped out of the house."

    Hmmmm. I wonder if that would have happened if the previous "owner" had still been in the house. And I wonder what the "natural value" of that house is now, as well as the "natural values" of the houses around it. And, when I bought my little condo, I didn't pledge my "honor," nor did the bank pledge its. I entered into a legal contract binding me to make regular payments or vacate the premises, a legal contract that could, of course, be revised with the consent of both parties. Honor in the real estate business? It's a rare concept and an unnecessary one.

    1. But they didn't contract for you to tear the place up when you left dipshit.

    2. Your loan included fixtures. I believe there is a legal "fixtures" test. Some lawyer can correct me, I learned about it from the "Andy Griffith Show".

    3. Seriously, if the bank assummed that potential foreclosure would result in the owners burning their house to the ground, why the fuck should they lend anyone any money. The contract states that you cannot destroy your house (the bank's collateral and only means of recourse if you declare bankruptcy). Only banks belief that this contract is going to be followed makes them interested in lending you money and frankly anyone that violates this trust should never be lent another cent ever again.

    4. It[honor]'s a rare concept and an unnecessary one.

      So the only thing that prevents Vanneman from eating babies for breakfast is the law or a legal contract?

    5. Sorry, Alan

      Almost every mortgage has a clause in which the borrower convenants not to 'waste' the property. In the legal sense, this means that they will neither neglect it nor cause damage to it. As John Tagliaferro points out, removing fixtures is causing damage.*

      It is possible that the property was abandoned and thieves entered and looted the fixtures, but that is quite rare compared with the deadbeat-house stripper scenario.

      You may think that your honor is not bound up with your contractual pledges, but if you won't keep a promise - and that is a what a contract is - that is made formally, in writing and in the presence of witnesses, then I wonder what you do think you are honor-bound to do.

      *In case you do not know, a 'fixture' is an item attached to the struture in a way that is intended to be permanent. Countertops, cabinets, doors, and flooring fall into this category. (Most appliances are 'chattels', unless they are built in like some airconditioning systems or vacuums.

      1. It's also possible that the occupants had paid for the fixtures and added them after buying the hosue, and just decided since they didn't come with the house, they mgiht as well take them when they left.

        1. Which changes things not one iota. Upgrading to granite countertops or adding a sprinkler system doesn't mean you get to take them with you when you leave.

        2. If they happened to have the old kitchen laying around, and if they could reinstall it to the same condition it was before the upgrade, well then perhaps they could take the granite with them... but only if the bank didn't know about the remodel.

          Legally, Night Elf Mohawk is correct.

      2. Sorry, I misread the original post. I didn't get the part where it was stated that the "deadbeats" had stripped the house. I thought it was robbers, my point being that leaving a house vacant has dangers for its "natural value."

        Still, it isn't clear from the post if the "deadbeats" committed a crime. If they did, it shouldn't be too hard to catch them. But the tone of the piece suggests that the "deadbeats" were within their rights to do what they did. And it wouldn't surprise me to learn that the realtor was lying when he said he didn't know the house had been stripped. I'm sorry, but finding a realtor with "honor" is tricky.

        1. Yeah, sure, the realtor wants to waste her time taking prospective buyers to homes they will never buy. Maybe your "lack of honor among realtors" is just projection of how you would behave?

      3. The promise you make in a mortgage is either to make payments or give the bank the house.

        Giving the bank the house completely and utterly and without qualification fulfills the promise made in the mortgage.

        1. The promise you make in a mortgage is either to make payments or give the bank the house.

          False. The promise is to pay back the amount loaned with interest. The house is merely collateral towards that. If the house doesnt cover the amount owed, you still owe the rest.

          Giving the bank the house completely and utterly and without qualification fulfills the promise made in the mortgage.


          1. True.

            Download the standard FNMA note and security instruments.

            Section 10 of the uniform multistate Note indicates that the Note holder is protected from losses incurred by non-payment by the terms of the security instrument.

            If they didn't think the collateral secured them against their loss, they shouldn't have entered into the contract.

            Naturally, I'm talking about non-recourse states here.

            1. Fuck non-recourse states. No one who counts lives in those.

              Im talking about recurse states - ie, real america.

              1. Lists of the non-recourse states (in some form or another) is pretty much a rogue's gallery of mortgage failure.

                Florida and Arizona are on the list.
                California is too, sorta. They allow judicial foreclosure with recourse, but its expensive and time consuming and not done.
                Nevada is on some lists, but apparently is actually a recourse state.

                States you dont find on the lists? Most of flyover country.

        2. The promise you make in a mortgage is either to make payments or give the bank the house.

          Giving the bank the house completely and utterly and without qualification fulfills the promise made in the mortgage.

          Half right.

          You might have noticed people using the phrases "recourse" and "non-recourse" elsewhere in these comments. I'd suggest looking into those terms a bit further and then revisiting your comment.

          1. Look, I spent 15 years in the mortgage industry at literally all levels.

            I'm familiar with every dodge asshole borrowers have come up with to try to claim that their contract is void.

            "The use of the MERS system means the mortgage was never really assigned! I can keep the house for free and not pay you!" Bullshit.

            "The lender overdisclosed the cost of the title insurance and the Truth in Lending Act says that means I get the house for free and don't have to pay you!" Bullshit.

            "The broker was paid a yield spread premium when they sold my loan! They should have regarded themselves as my fiduciary! That means the loan is void and I can keep the house and not pay you!" Bullshit.

            "Well, I can't pay, so I guess you get to take the house. I am putting my stuff in a moving van. The security instrument and the laws in my state say this means we're square." Not bullshit.

            1. Not bullshit.


              Even on a short sale you have to get the bank to agree to a "short sale without recourse" so they dont come after you for the residual. Of course, Im assuming we are in one of the 34 recourse states, because the other 16 are fucking loser states.

              1. Okay, numbers like 34 and 16 are kinda bullshitty on my part. Googling shows many different lists of the states: looks like there are really 3 or 4 categories, but the 34/16 numbers are pretty close to right.

                Categories are
                1. Non-recourse states
                2. Recourse states
                3. Tweener - states that have judicial vs non-judicial foreclosure, if you go non-judicial, there is no recourse.

                There are some other weirdnesses that might justify splitting group 3.

    6. Alan, you are deluded. When you take out a mortgage to buy a house, you are BORROWING someone else's money, which you are signing a contract to pay back, with interest. I have to tell you, if you do not regard yourself as OWEING them the money at that point, I really do not want to ever do any business with you. Revised with the consent of both parties? YOU OWE THE MONEY! Why would the creditor voluntarily agree to modify the contract unless you were planning to cheat them? Never mind what the house is worth, you BORROWED money from someone else. Yeah, honor demands you pay it back.


    1. You forgot about the pony.

      1. Pony my ass! Magic unicorn baby!

    2. I'm pleased you understand the need for a positive bill of rights.

    3. You forgot sex with hot chicks. No fat chicks for new world men either. The government must supply us with a steady stream of supermodels and aspiring porn stars to fuck.

  7. or, like poor Renter, living in lousy apartments while waiting for the real estate market to hit bottom.

    I can feel for the angry renter. But that ad with that damn photo of that 17 year old d-bag looking into the mirror just bugged the crap out of me.

  8. Employed renters are buying into my neighborhood already. I met a young guy at the neighborhood pool party last Saturday that had just bought a house for half of what I paid for mine.

    The fucking little shit! ahem, excuse me.

    1. I feel your pain.

      I too have the curse of bad timing so that I am perpetually buying into something just as the market peaks.

  9. And of course if these people now under water had made money on their hosues, I am sure they would be sharing that with everyone.

    1. Where I live there was a program to help low income families buy a first home, provided they could come up with 3% of the house price. If they could, the county would give them $60,000 interest free for 30 years to put towards the house. If they sold the house before then, the county would receive back the $60,000 plus a portion of any profits based upon the percentage the total the owner had put in and the county $60,000 (equity share). That was all fine and dandy until housing prices took off and the "owners" tried to sell their homes only to realize that the county would receive 95% of the profits. So instead of being happy they were living in a $350,000 home but only making payments on a $140,000 loan, they went to the papers to complain. The good new is nothing came of the complaints.

      1. I hadn't heard that one before, but I can't say I'm surprised that they would go to papers to bitch about not getting their (highly) leveraged windfalls. These are likely the same sorts of people who would complain about "greedy" hedge fund managers, too.

  10. Did you notice the subtle emotional lie perpetrated in the sentence above? Foreclosures do not weaken neighborhoods

    Yeah, I don't know. Lookit these pool skaters in the foreclosure wastelands of Fresno, CA. Sure they clean the abandoned stagnant pools at first, but when the pools are ready for carving, that's when the graffiti, AIDS and nu-metal grab a-hold. 🙁

    1. If these places weren't being marketed at absurdly high prices, responsible people might be snapping them up. That is the point.

      1. I hear ya.

  11. ...graffiti...

    I wish. It'd just be scrawling a gang sign these days. California hardware stores have to keep the Krylon shelf locked.

    1. But they still sell the house number decals, which is the new way to tag.

  12. Good morning again reason.

    1. Hi Suki!

      1. Hello! Check my earlier comments about 6.5 hours from now.

        1. I certainly will. You were a tad late today, 12:02 [Suki Time]. Is everything OK?

  13. Morning (EST) link: Whitey breaks out the pseudo-ironic herd-culling metaphors to ask, "Is it time to crack down on Juggalo culture?"

    1. They're fucking with the Wu-Tang Clan. I remember pretty clearly a song that specifically stated the Wu-Tang Clan isn't anything to be fucked with.


    2. Juggalos are human garbage. I'm glad they make themselves easy to identify.

      1. Juggalos are human garbage.

        What about me?

    3. When a writer at Salon recommends an authoritarian crackdown on a subculture she doesn't like it...it's hard to tell if she's joking.

    4. Mary Elizabeth Williams starts out with
      "As if we didn't have enough menaces this summer." That's a snarky enough use of the 'we' word to go along with for a few sentences, but she won't let it go. "We all...", "We know...", "..we don't...".

      The only thing I got out my new found knowledge of Juggalo culture is that article is that Mary Elizabeth Williams is a Borg.

    5. What the hell is Juggalo culture?

      1. A bunch of idiots dressing up like clowns (literally), listening to a third-rate rap group, and committing senseless acts of violence.

  14. Here is another issue where I agree with you guys. The government has no interest in propping up home prices, or keeping foreclosed "homeowners" in the banks' homes any longer than necessary. Three missed payments should be enough to land you on the street, and all loans should be full recourse.

    And until you have paid off your mortgage in full, you don't own diddly.

    1. Maybe so. But it is not what I'm seeing in my town.

      I know a property that has been in default for 3 years and the bank is doing nothing.

    2. who are you, and what have you done with Chad?

  15. The kind folks in the "Good Ol' Boys Club" are buying foreclosures off the county courthouse steps and renting them out to taxpayer fund Section 8 renters.

    Furniture and appliance rental companies make monthly deliveries and picks ups on my street. Not really pick ups, more like repos.

    Ask any of my neighbors how desirable my neighborhood is. We all want to move.

    1. The kind folks in the "Good Ol' Boys Club" are buying foreclosures off the county courthouse steps and renting them out to taxpayer fund Section 8 renters.

      no they arent. foreclosures arent sold that way. seizures for failure to pay taxes are but those are rare and havent gone up any during this financial crisis.

      1. Actually, here in God's country (aka Arizona), some banks are tipping favored buying groups about foreclosure sales and making deals to refrain from making credit bids if the buyer bids a prearranged price at the foreclosure sale. Since only that buyer knows the price, nobody else shows up, and the buyer gets a windfall price. The bank then does not have to take the house into inventory and find a buyer, and the buyer then flips the house to a third party for a profit. Probably, this is a violation of the trustee's sale statutes, but it is happening with some frequency.

  16. This is all fine except...

    Why am I supposed to be sympathetic to those renters who want to somehow catch the market bottom in real estate prices? I think you are a fool if you live in a crappy apartment for years worried that you won't finally buy your house at the bottom. It's well known that people can't time markets, although they always think they can (kind of like they always think they are good drivers). You need to man up and dive in.

    1. Man up, dive in and default. It's the American Way?.

    2. That's a fair point, but I don't think they're bitching about market timing, they're bitching about market manipulation.

      1. Yeah, I think they're bitching that they timed the market correctly, and the government is preventing them from realizing their windfall.

        Kind of like if you had shorted Lehman big, but the government stepped in and said, "We declare that the price of Lehman stock is forever fixed at $100 a share." You would be a little...perturbed.

    3. Shouldn't you be in Azkaban?

    4. As a renter, I have made the decision that it doesn't make financial sense for me to buy a house at the current, still inflated prices in So. Calif.

      But here is what I am dealing with in this regard.

      1) The various levels of government are doing their damndest to keep prices inflated because that's what the "public" wants.

      2) I am paying taxes to support home purchases by "low income" residents.

      3) I am paying taxes to bail out the various mortgage programs that made poor investments, thereby subsidizing the people who bought homes they couldn't afford.

      4) the various home modification programs are keeping money tied up, resulting in higher overall interest rates.

      5) When people were flipping houses and making sustantial profits, they didn't share them with me, but now expect me to bail out their investment.

      My idea is to get the government out of the housing finance/subsidy business, let the market fall to it's "natural level" (that is, the level where people will buy without the subsisdies), and work from there.

      Additionally, did anyone see the reports on the housing sales slump after the tax incentive program ended. All the rebates did was time-shift the purchases forward a few months without increasing the total number of sales over time. Another pile of money flushed down the toilet, and the government crows about what a success the program was.

    5. You raise a good point. But it's not always market timing. There really are people who haven't bought yet because they are diligently socking up enough money for a down payment and a personal rainy day fund so they can buy prudently and be secure in their own homes. In fact, most people are like that. And when the government is assisting deadbeats, those people get injured. (How big the injury really is is open to debate: Ultimately all the efforts of all the governments on earth are as rags in a fire against the Blessed Deflation.)

  17. I wonder. Is this really about propping up homeowners or is it about making sure the banks stay solvent? My gut tells me a wave of foreclosures would have the financial system circling the drain again. Maybe it's a case of prop up the homeowners now or prop up the banks later.

    1. Many banks are still holding RMBSs and CDOs that are marked-to-myth (suspension of FASB 157). Eventually, these will mature and show their true value, which is probably about 20 cents on the dollar, and the banks will be forced to write down the losses. The more mortgages that can be saved, the less the actual assets will fall.

    2. Either way it is punishing the responsible and rewarding the irresponsible.

      The deadbeat homeowners were irresponsible to get in over their heads and the banks who loaned them the money to do so (and Fannie Mae and Freddie Mac for buying the loan off the bank and securitizing it) were also irresponsible.

      The responsible taxpayers - whether they be renters or homeowners who ARE paying their mortgages (or who have already paid them off or who never needed one to begin with) are being asked to bail all those other people and instititions out. And their intelligence is being insulted by being told it is somehow in their own interest to do so.

      And THAT is an absolute crock.

  18. I'm still waiting for the commercial real estate to tumble. There's this bar down the street from me I would like to buy. The current owners bought it for $1 million, and put $200,000 in improvements into it. They are asking $1.2 million. It has been sitting empty for over 2 years. Personally, I think it's only worth about $850,000. It was only open for about a year under the new owners. However, for over 20 years it was a successful business.

  19. The last time I heard people angrily arguing "This policy is no good because property values will fall!" was in the late 1950's.

    The issue was racial integration in housing.

    Deja Vu!!!

  20. Actually, the unspoken argument is that lower prices do hurt neighborhoods--because lower prices allow minorities to buy in. (Reminds me of a saying a wise lawyer once told me, "Scratch the surface of almost any environmental rule or restriction on development, and you will find white people trying to keep black people out of their neighborhood.")

  21. I live in a town with unemployment near 20% and real unemployment near 30%. There are no employed people waiting to snap up houses.

    There are 3 empty foreclosed houses on my block and about 4 more on my side and the other side of the street that are unoccupied i.e. awaiting foreclosure.

    From what I can tell the banks are not foreclosing. Why should they? They will have unoccupied houses that will deteriorate faster and add to the look of a neighborhood in trouble.

    Better to just suck up the losses and wait for better times where the properties will actually move - even at a loss.

  22. As someone who scrimps mightily to continue to make on-time mortgage payments every month on a greatly diminished income (between my wife and I, we make slightly more than half what we made when we bought the place in 2007), I agree heartily.

  23. The promise you make in a mortgage is either to make payments or give the bank the house.

    Not really. You promise to make the payments, not wreck the place, etc.

    The bank has the right to take the house if you default. Its not the same thing as you promising to either make payments or mail the keys. If you stop making payments, you have defaulted even if you mail in the keys.

    1. Actually, even if you are making the payments, if you neglect or wreck the property, you are also in default if the mortgage has a clause forbidding you to 'waste' the property.

      1. Sure. Don't most banks, if not all, require you to carry home owners insurance, as well?

        1. Yes.

          Plus, the due on sale clause (in most states).

  24. Of course, bailing out the housing market will lead to inflation one way or another. It's not particularly pretty what the Fed's doing: http://solutionproblem.wordpre.....r-another/

  25. Obama's HUD agency and it's section 8 program is CORRUPT. Right now hundreds of thousands of dollars of taxpayers money is going to fund a Section 8 Program in Los Angeles that is in violation of federal housing quality standards.Our tax money is going to fund the career of African American Comedian Steve White instead of funding the housing for the low income people who live in his roach infested, health hazard of an apartment complex. For years he has been written up for violations but HUD continues to line his pockets with taxpayer money while his tenants become ill from respiratory infections. children are being endangered but HUD has not pulled this slumlord contract. An expose is being written called Post traumatic section 8 disorder. Renters are affected by this housing crisis too, because landlords are turning into slumlords, and Obama keeps signing the check.

  26. Lower prices makes existing homedebtors unhappy because their dreams of home equity wealth are revealed as sad fantasies.

  27. making people focus on adding value and working for a living will strengthen neighborhoods.

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