Back To Reality, Foreclosure Moratorium Ends


I had been hearing a lot of talk lately about how home foreclosures were down. Real estate agents were pointing to this and saying that the market was going to turn around soon. Even the talking heads on the late night news were reporting that foreclosure filings were down and things were going to get better. Could we really have hit bottom?

Image via Wikipedia

Image via Wikipedia

Not so fast. This was just a case of spinning the facts to make them say what you wanted. What they didn’t tell you was that foreclosures had dropped because of a moratorium on new filings. Fannie Mae and Freddie Mac, along with many banks, had temporarily halted foreclosures while they waited to hear how the new administration was going to handle the crisis.

Hail Mary Falls Incomplete

However, the moratorium was recently lifted and that hoped for game saving touchdown pass fell to the ground. New foreclosures were up 24% in the first quarter from the previous year, so much for hitting bottom. When it became apparent that Obama’s plan was not going to be a miracle cure, the banks resumed taking properties back. In a press release Realty Trac’s CEO, James J. Saccacio, said “In the month of March we saw a record level of foreclosure activity – the number of households that received a foreclosure filing was more than 12 percent higher than the next highest month on record.” Clearly there was not going to be a fantastic comeback in this game.

The states hardest by foreclosures were, once again, Nevada, where one of every 27 homes received a filing, Arizona, California, Florida, Illinois and Michigan. This is a contest where being number one is not such a good thing.

Hype, Hope & Reality

The campaign trail hype and rhetoric has been replaced by harsh reality. This mess is not going away anytime soon. While Federal Reserve chairman, Ben Bernanke, sees “green shoots” and President Obama sees “glimmers of hope” in the economy, reality paints a much gloomier picture. While it is important for the President to remain optimistic, these foreclosure numbers are hardly a reason to be hopeful about any recovery in the near-term.

Nobel Prize winning economist and New York Times columnist, Paul Krugman, isn’t so hopeful. Despite being an unabashed Obama supporter, he is concerned that the administration could become complacent as a result of their own spin doctoring about these hopeful signs. In a recent column he says, “Don’t count your recoveries before they’re hatched.”

Even one of the worst economic times in our history, the Great Depression, had a number of false starts. When things are really bad people will look at any positive statistic as a sign of better days. Unfortunately many of these numbers are nothing more than the dead cat bouncing again. We may have a long way to go before this is over.

The Great Depression, like most other periods of severe unemployment, was produced by government mismanagement rather than by any inherent instability of the private economy. Milton Friedman (economist)

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  1. As the clock continues to tick on, we only see further evidence that we’re making little progress. I only hope the administration opens their eyes to the fact that people are catching on to what is going on in the marketplace, and they aren’t liking what they see.

  2. I was wondering when this foreclosure moratorium was going to be lifted? All it did was give people an extra three months of living in their house without having to make a payment. They couldn’t afford it three months ago and they can’t afford it now. The painful reality is that it’s going to take some time to work our way out of this mess with housing. If the gov’t wants to help let them give incentives to people with cash to buy up these homes. Once the inventory shrinks, prices will stabilize and go up. AH, capitalism! Supply and demand!!! Yes, greed from capitalism got us into this mess and greed from capitalism will get us out of this mess!!!!!!!!!!!!!!!!!

  3. Our Government wants Socialism which in turn can lead to Communism and they’re willing and able (thanks to dirty politics and ignorant voters) to do just that.
    Obama along with his sidekicks are all hellbent on destroying us while making themselves the supreme superpower over first us, then the entire world.
    But the only remnants left who oppose what’s happening are by far outnumbered by those who worship Obama and his administration and if we try to revolutionize our government and take it back we will have a civil war on our hands and people will die.

    I think only God can save us now. Michelle.

  4. Hey Ned B.
    Clearly you’re not someone who has been impacted by this recession, or you might be a little more compassionate for people who find themselves in the unenviable double whammy position of being out of work through no fault of your own AND faced with losing your home. I’ve had a good career for almost 20 years, am a second-time homeowner, and could more than afford my debt load including mortgage for what I was earning. I also had 6+ months of savings put aside and was far from living on the edge.

    Then to my shock my job was suddenly eliminated, and for the first time in almost 20 years I am having trouble finding a job. I have good credit, have never missed a mortgage payment, and expect to be back to work shortly. So why should myself and people in my shoes not be eligible for some kind of temporary forbearance rather than be immediately thrown out of the street?

    I suspect if you and your family were in a similar position you would be singing a very different tune. You are ignorant and close-minded and might consider looking at other peoples situations before sounding off.

  5. They couldn’t afford it three months ago and they can’t afford it now. The painful reality is that it’s going to take some time to work our way out of this mess with housing. If the gov’t wants to help let them give incentives to people with cash to buy up these homes.

  6. I think greed got us here. A self feeding frenzy of capitalism from the top trying to make a enormess profits by bundling and “A” rating the american dream and selling it as and “A” rated investment on wall street and the bottom people being allowed to buy & buying more than they could afford. Or buying for investment further driving the baloon. Greed got us here. It is an ever changing world and I think it will be a while before the unchecked greed wil drive us back into an economic furry of spend spend spend/Borrow, borrow, borrow. Does any one believe in living within there means??? Saving for a purchase? Buying a home as a place to live not as an investment.

  7. Pingback: Foreclosure outlook for Circleville & Chillicothe | Homes and Real Estate for sale

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