|
 |
Subprime 4/29/2008 3:07:49 PM EST She Came In Through The Bathroom Window LexisNexis Quality & Training/LexisNexis Law Center Staff There were a number of interesting real estate/mortgage crisis/collapse of western civilization stories over the weekend:
From the Washington Post comes this story about the challenges facing suburban law enforcement now required to police so many empty houses. Police are encountering a variety of activities in abandoned houses, everything from teenagers hanging out, to squatters, to vandals looking to steal appliances and copper, to more nefarious activities like planting marijuana crops in the overgrown yards.
This AP article (in USA Today) looks at the attractiveness of foreclosed homes to homeless people. In many communities the homeless are outnumbered by the vacant houses. Foreclosed homes are much more livable that condemned buildings and can even offer such amenities as electricity and running water. But they can also be dangerous because they also attract drug dealers, prostitutes, and vandals.
My favorite story from the weekend is this one from the New York Times. In addition to being attractive to the homeless and assorted criminal elements, foreclosed homes are also attractive to a host of non-human pests, including bees. In Lee County, Florida, an area with one of the highest foreclosure rates in the country, bee infestations have turned up in hundreds of empty homes. At last! A solution to the colony collapse disorder plaguing the American bee industry. The kicker is that some of these bees may be the dreaded Africanized honey bees who have apparently been waiting for the right moment to pounce. Insidious little buggers.
The Financial Times reports that new home sales have hit a 17 year low. Single-family home sales were down 8.5 per cent in March to a 526,000 annual rate. This is 36.6 per cent below the same period the previous year and the lowest since October 1991. The median sales price of a new home fell to $227,600 from $244,200 in February, 13.3 per cent below last year’s figure. This is the biggest decline since 1970. Inventories of unsold new homes at the current sales rate rose 7.8 per cent to 11 months supply, the most since 1981. Tighter credit conditions and weakening consumer confidence were blamed for the abysmal state of the housing market.
Finally there’s this brief piece in the Financial Times on Congressman Barney Frank’s proposed solution to the mortgage crisis. His plan would authorize the FHA to refinance between $300bn and $400bn worth of mortgages at 90 per cent of the value of the home, if lenders agree to write down the remainder of the loan. The purpose is to keep struggling homeowners in their homes by giving lenders an incentive to restructure the loan rather than foreclose. But I wonder whether by keeping homes off the market the plan may also keep home values from returning to more realistic levels. This would ultimately make homes less affordable to middle and lower class folks. As one would expect, the Bush administration isn’t exactly jazzed about Congressman Frank’s plan. Create an account or login to post comments.
|