Home | Forums | Bible | +Width | Subscribe | Member Login






Saturday, May 26, 2018   3:59:57 AM  
  
 Welcome to The Omega Letter   Daily Briefings Commentary News Room   Contact OL Site Map How Do I?
Testimonials Prophecy Israel Globalism Terror In Defense Around the World War News Witnessing Perspective Commentary

Omega Letter Member Log In
 
2 Timothy  4 : 3
For the time will come when they will not endure sound doctrine; but after their own lusts shall they heap to themselves teachers, having itching ears;
Read Today's Proverb - Chapter 26
 
Why Subscribe?
Subscribe Online   Online
Subscribe By Mail   By mail
Contribute
Public Registration

Forum

 

Zeteo 3:16 with Alf and Alesia Cengia

 

 

THE END THE BOOK THE SERIES: J.L. Robb

The End The Book Part 6

 

 

 
 
 

Bible Prophecy News Christian Current Events


The Omega Letter Commentary Archives ...

Open Text: Exact Phrase:





Oh, The Mass of Humanity
Finance
Perspective on the News
Tuesday, July 20, 2010
Ed DeShields

It’s hard to get a personal perspective about the millions of home owners who are going to lose their homes due to the housing crisis;  that is until you talk to the industry specialists that hear their stories every day.

Last week I began the first week in my 7,500 mile, eight-week speaking tour on the business of dealing with the industry that is faced with solving the problem of a couple of trillion dollars in assets that have simply evapoated into thin air. 

I began in Los Angeles on Friday, San Francisco on Tuesday and Denver today.    

The punch line is that the housing crisis is far from over.   In Los Angeles and San Francisco, the destruction of home owner equity has been profound.   A home once costing $500,000 now sells for as little as $225,000 –  50%+ reduction in price.   Unfortunately most home owners, especially those who purchased in the last ten years, owe more on their home that will ever be recovered.   An increasing number of these homeowners are choosing to walk away from their obligation by throwing up their hands in defeat.  This process is called the “short sale”.   And, the banks find it easier, and less costly, to promote this idea of removing a failed borrower than to push a judicial foreclosure.

I find it particularly amazing that many failed homeowners actually game their creditors by squatting in the home they can no longer pay for.  These squatters are actually negotiating a “cash for keys payment” which is a ransom of sorts to leave. 

The number of strategic defaults – those consumers who after seeing their homes value drop below what they owe for it – is soaring.  Each time a consumer walks away the bank takes the hit (short sale) and passes that hit onto the insurers who warranted their loan from default in exchange for a premium.   Eventually the bank becomes the owner of the home.  But banks aren’t investors.  So they dump the homes to investors who stand in line by the dozens to pick the bones.  The lucky winner quickly flips the home back onto the market for a quick profit.  Consequently, the number of distress homes on the market represents about 50% of all homes currently for sale. 

Home prices are not going to come back until unemployment falls to a more normal rate.  In the meantime more homes will go unsold as prices continue to fall.  This is destroying home prices further, and entire neighborhoods in many cases.

It is widely believed that there are currently 12 million home owners that have stopped paying their house payment realizing that when faced with bad news, they can likely stay in their homes rent-free for an average of 14 months.  In the mean time these 12 million consumers spend their mortgage payment (an average of $1,700 per month) on consumer items, like new televisions and the like.   If you account for this version of consumer spending it is revealing when the government proudly announces that the recession is over because consumers have now returned to spending.

The entire mortgage finance industry has shifted from making and servicing loans to evicting, collecting and taking homes back and recycling them with investors who efficiently erase the history of memories from a mass of former homeowners. 

About Ed DeShields

Last week: It's About Jobs



Current Article Ranking: Average Rank of 2.80 Stars

Rank This Article: Rank this Article 1 star It's an article.
Rank this Article 2 stars It's informative.
Rank this Article 3 stars I liked it.
Rank this Article 4 stars Inspiring!
Rank this Article 5 stars It's a home run!

If you have already Registered, then Login and start a discussion.
Share on Facebook
OmegaLetter Exclusive Commentary
On Jesus Christ and Romney's Complaint Persia and the Jewish People LAND LIES The Benefit of Studying Biblical Prophecy Rapture Dates and Trumpet Judgments
    Rss Feeds

Member Contributed Articles
Just Thinking Stage Setting On Steroids--2017 Prophetic Year in Review Professor Grant Horner's Bible Reading Plan Modified A Life (and Death) Worthy of the Gospel Sometimes Life Sucks but God is Good




Omega Letter Links
Fight For JoyGot Christianity?Hal LindseyJack KelleyJewish VoiceLion & Lamb MinistriesNow The End BeginsOilprice.comOlive Tree MinistriesOmegaletter MediaOther SitesProphecy TrackerProphecy UpdateProphezineRapture ForumsRapture ReadyReasonWorld Prophecy NetworkWorld Watch Daily

The Omega Letter Bible Prophecy Christian Intelligence