Presidential candidate Mitt Romney would nip the housing recovery in the bud by pushing several million more foreclosed homes on the market this year by cancelling Obama's home modification program. He would force more properties onto the market than could be easily absorbed, drive prices of homes on the market down even further, and ultimately reward the money-bag investors who caused the housing market collapse in the first place because they can snap up houses at bargain-basement prices.
Ron Moore, who opposes all loan modifications, asks me why I think, if eight million foreclosed homes are quickly pushed onto the market by the banks, that many will stay vacant and run down for a long time? Er, the law of supply and demand and common sense make me think that's what would happen. It would take years for the housing market to absorb such a glut. We are already seeing, in certain minority neighborhoods, that the banks have failed to maintain and market many of the properties foreclosured upon. Click.
I didn't "deplore" the bursting of the housing bubble in places like northern and southern California where prices had gone through the roof. A market adjustment was necessary. What I deplore is the economic collapse of 2008-9 and the loss of 8 million jobs in short order, through no fault of the people losing those jobs.
I don't think they should be ruthlessly foreclosed on and put out on the street, causing the worst calamity since the Great Depression. I think it is far better for banks to offer loan modifications and other programs to work with people and keep at least some of them in their homes if they have steady sources of income and can make reliable payments. Principal reductions, interest rate reductions or other loan modifications seem like a good way to provide dispensation for families caught up in an economic whirlwind unprecedented since the 1930s.