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Housing Nightmare
For years, home ownership has been seen as the surest path of rising into the middle class and the most significant source of savings for many families. So how could it be that buying a single-family home has made so many people in this country worse off?
The answer is simple, according to John Wasik, author of a recently released book that examines the housing crisis, "The Cul-De-Sac Syndrome: Turning Around the Unsustainable American Dream."
"The whole premise of the ‘Cul-De-Sac Syndrome’ is we hit a dead end," he said. "We hit a wall of unaffordability. I want to convey the…
9Jul2009 | The Real Deal | 1 comment | ContinuedSolution to the Housing Problem
Let housing find its clearing price
James Saft
The U.S. government should just get out of the way and allow the crash in U.S. housing; the market is too big, has too far to fall and Americans’ finances are too strained.
President Barack Obama’s measures, unveiled on Wednesday, are part of a $275 billion plan to try and stabilize the housing market and prevent foreclosures. It aims to encourage lenders and their agents to cut repayments for homeowners in difficulties to lower, more affordable levels as well as other steps.
“You probably have about two to three million homes that we overbuilt, a lot…
Bankruptcy Law Alters Obama’s $275 Billion Housing Plan
U.S. President Barack Obama yesterday (Wednesday) released a proposed housing program designed to prevent up to 9 million “at risk” Americans from losing their homes. However, some critics say they were surprised that the proposal is more ambitious – and more expensive – than initially expected, and includes controversial changes to bankruptcy laws that could cause the mortgage market to freeze up.
In fact, an Obama administration official told Reuters the total plan commits up to $275 billion for housing, including $50 billion from funds already committed in the country’s financial sector bailout.
Headlining the plan is a $75 billion Homeowner Stability Initiative,…
19Feb2009 | Money Morning | 0 comments | ContinuedHistory suggests that this is just another crisis like many others, and this too shall pass.
The current housing and banking crises are both unique and severe. Billions of dollars of wealth have disappeared over the last year, in some cases in just a matter of days. Companies that have been household names have gone bankrupt, with others on the verge of failing as this article is being written. Make no mistake; these are scary times with both professionals and the public wondering if their money is safe. Is this the end of the U.S. financial system?
Although we cannot predict the future and suspect that anything is possible, history suggests that this is just another…
21Sep2008 | Managing Money | Comments Off | ContinuedWith Much Blood-Letting to Come, the U.S. Housing Finance System Needs Replacing
In much of the discussion about the collapse of the U.S. housing market, commentators have assumed that the massive run-up in property prices that preceded the subprime-mortgage meltdown were simply the result of a speculative frenzy that became a full-fledged market bubble.
But that’s not the case at all.
You see, the bubble and subsequent crash were inevitable under the current system of housing finance. Fundamental changes must be made.
Standard and Poor’s recently projected the likely future loss rate on the $650 billion of subprime-mortgage-backed securities that are still out in the marketplace. From that we can estimate the losses S&P is…
2May2008 | Money Morning | Comments Off | Continued
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