Watch“The Federal Housing Administration finds itself in rather dire fiscal circumstances as mortgage after mortgage after mortgage that it made to people who should never have been given a mortgage are defaulting every hour. 17% of the FHA’ mortgages are now delinquent and this is a shocking number.”
So what is the Obama Administration doing about it, asks Dennis.
“Well it is extending the so-called grace period being allowed to its mortgagees. Starting in August of last year, the FHA began extending this grace period, giving dead beats a longer period of time in which to beat dead. Now, if you are unemployed but have an FHA guaranteed or issued mortgage you can miss a full year’s payments and not be considered delinquent… up from what we considered an already far-too-lenient 3 months. After a year in the grace period if no payments are received, the FHA will begin foreclosure. However, as we understand it, if one payment is made before the twelve months is up, the mortgage is considered current and the clock begins again.”
Dennis concludes, “Really, you cannot make this stuff up. What we have then is a growing pool of mortgagees who know that their house shall eventually be foreclosed upon and thus whose upkeep on the house diminishes with each missed payment. As one prescient economist once said, ‘Never in history has a rented car been returned waxed.’ Always in history ‘renters’ treat houses more poorly than owners, and owners not making payments are not even renters… they are merely squatters.”
http://www.businessinsider.com/housing-fiscal-cliff-dennis-gartman-2012-12#ixzz2E0KXqE4B
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So nice and so generous! I hope I am one of the lucky squatters.
Is this one of the gifts given by Obama for people voted for him? With tax payer’s money, government can certainly do a lot of “nice” things. Unfortunately, tax payers would have to pick up the bills for the free rent. To be fair, Obama and the director of FHA should contribute their one month salary as “fair share”.
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Am I reading this right? So they only have to pay one month per year to stay current? So they only pay 1/12 of their mortgage? Never "owning" of course.
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Simi Valley, CA
these are the people who lost their jobs and have not been able to find new jobs despite trying. i think it's fine to give them more time if they are at least trying.
it's those who have jobs but "strategically default", because their homes are no longer worth what they paid for, that should be immediately evicted from their homes. extreme force should be used when necessary.
don't matter if these chronic squatters have 25 kids or are widows of deceased boomers boo hoo hoo. they are not above the law.
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Mark D says
This is what happens when the FHA basically gives "free" money. When all that is required is a 3.5% down payment and in many cases there are seller concessions to the buyer, these buyers have very little "skin in the game" invested in the house.
Makes it real easy to "miss" a payment....
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It ought to be a constitutional amendment:
Cash or Fuck you!
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Seattle, WA
David Losh's website
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For crap's sake, if you leave a property vacant you lose your insurance.
These are insured loans, and every day the price on them is going up.
So, what if we miss a year of interest payments?
The properties will be foreclosed, they will get sold, and the prices paid will be higher than they were a year ago.
It amazes me that people think the banking industry doesn't know exactly what it is doing.
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David Losh says
Really think so??? Not here.....
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David Losh's website
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Call it Crazy says
Well, look at your chart, it's what I've been talking about.
How do you go from $190K to $300K, and then when you settle at $212K that's some how a loss.
You have to take the spike out of the equation, and look at historical trends.
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David Losh says
Because this is what you said above:
David Losh says
So, my chart shows you that if you went back a year, prices were higher then and have come down, they are not higher NOW a year later like you stated... in fact, prices have dropped each of the last five years
David Losh says
Make up your mind... are you talking a year ago or do you want to pull a trend line from 2003???
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Seattle, WA
David Losh's website
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Call it Crazy says
Yeah, look at your chart again, and for some reason I think I have seen it before.
What you are saying is that in 2011 the house, a house, was worth $230K, but today it's only worth $212K.
What's the property mix of your chart?
It doesn't matter, you are focussed on a blip on a chart when the idea is that properties have come up in price this past year.
This is a chart giving you a trend, and it goes back to 2003 for that purpose.
Your chart shows that since 2003 property prices have gone from $190K to $212K.
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Seattle, WA
David Losh's website
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Uh oh, I pulled up Ocean City, and it looks like property prices are up,
http://www.zillow.com/local-info/NJ-Ocean-City-home-value/r_15845/
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David Losh says
That's what the trend of the chart says from last year..
David Losh says
It's a Zillow chart of single family houses....
David Losh says
My "blip" takes into account the last 5 years, that's a hell of a "blip". Your comments above were about how house prices have risen since last year.
David Losh says
It doesn't matter how far it goes back, my original response to you was that house prices haven't risen like you stated here:
David Losh says
So, once again, I have highlighted the Zillow chart so you can not only see what took place LAST year but even the few years before that.
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David Losh says
You need to read a little closer... my chart was from Ocean COUNTY not CITY... it's a little bigger area....
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Seattle, WA
David Losh's website
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Sorry http://www.zillow.com/local-info/NJ-Ocean-County-home-value/r_659/
Shows prices at $231K which is down 2.2% Year over year, but higher than the price shown on your chart.
You're argueing that banks some how don't know what they are doing when all of this government legislation is to prop up banks. It seems to be working.
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David Losh says
No, this all goes back to your blanket statement that "prices are rising". I just pointed out that it's not a correct statement.
Real Estate is local, and on this side of the country, prices are still going down.... that's why you can't make general statements.
Besides the county chart I posted above, here's the chart for NJ which shows, besides the normal peaks and valleys, the general trend is down the last few years... NJ is a lot larger geographical area then some of the cities that have posted gains recently (like Phoenix).
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Scottsdale, AZ
robertoaribas's website
NJ has one of the largest backlogs of foreclosures anywhere, ridiculous taxes, etc. Any positive statements I make about housing value have no basis in NJ...
I was talking to a colleague who just moved here from NJ, their home taxes where higher than my entire mortgage... and according to them my house is twice as nice...
To each their own, a better question than why buy in NJ, is why live in NJ????
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robertoaribas says
That's the problem, most people could give a rats ass about your little piece of Phoenix as it relates to the rest of the country....
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Seattle, WA
David Losh's website
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Sorry, let's try this again with New Jersey:
http://www.zillow.com/local-info/NJ-home-value/r_40/#metric=mt%3D34%26dt%3D1%26tp%3D6%26rt%3D14%26r%3D40%252C395164%252C394348%252C395193%26el%3D0
Which again proves my point that in 2003, when you use the ten year historical chart, prices in New Jersey were $242K, today they are $257K.
Banks are recouping what the market will bear, and the market right now is averaging better than it has historically.
Actually according to your chart the price of property is higher which accounts for some of the peaks, and valleys.
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David Losh says
I really wonder about your ability to interpret a chart.....
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David Losh says
Here, I drew a trend line for you, since you seem to be having difficulty figuring out if prices are rising or falling....
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Seattle, WA
David Losh's website
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Call it Crazy says
Five years from peak doesn't make a trend line. Checking month to month doesn't make a trend, but bottom line is banks are doing very well, and have recorded the strongest profits in six years, which corresponds with home prices rising the most in six years, in October.
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Scottsdale, AZ
robertoaribas's website
David Losh says
the banks are making profits on their current book of business, since they can borrow at near zero, they are making fantasic money; theoretically, they should have booked the losses on these loans as soon as they went a few months late on the mortgage, but who the heck knows these days...