According to a CNNMoney article today, many experts believe that the best medicine for the housing market is to speed up the foreclosure process, and they believe that the Obama administration should pave the way!
Those of us who work in the trenches fully realize the futility of the attempts thus far by the Obama administration to stem the rising tide of delinquencies and foreclosures. Jacksonville Florida based Lender Processing Services, Inc. states that of the 2.2 million loans in foreclosure today, approximately 37% (more than 800,000) have not made a single payment in more than 24 months. 750,000 of them have not made a payment in more than 12 months.
A rapidly growing number of such properties are in a declining state of disrepair, many are abandoned. How can this be good for neighborhoods, communities, and/or the housing market in general? That which is good for the communities is good for our economies. That which is good for our housing markets is good for our economies. Want to create jobs and put people to work? Stimulate the housing market!
Generally speaking, I believe in and fully support a more limited federal government role in our lives. However, a very wise man once said, “If you find yourself in a hole, quit digging”. That is exactly what needs to be done in this case. Somehow, some way, the nation’s largest lenders must be encouraged to accelerate the processes of a) Modifying the rates and/or terms on delinquent loans in their portfolios; b) Approving short sales; c) Foreclosing the rest.
Often, it is the most complex problem that has the most simplistic solution. But don’t try to sell that in Washington, ‘cause as we say in the south, that dog won’t hunt.