Foreclosure Assistance Will Benefit Four States
February 26th, 2009
Although the foreclosure crisis of the nation is focused in four states, which will be benefiting the most from governmental assistance, the taxpayers of the entire country will be feeling the pinch. Nearly half the foreclosure postings came from Arizona, California, Florida and Nevada according to RealtyTrac. But only a quarter of the total mortgages are located in these regions. Since 2007 the increasing number of foreclosures in these states have been pulling up the national figures.
The lawmakers are gearing up to utilize $100 billion from the bailout funds on a comprehensive foreclosure mitigation measure that is being initiated by Barack Obama, the President-elect. The concentration on these four states and the resulting discrepancy is adding to the existing confusion about the causes and remedial measures on the foreclosure issue.
RealtyTrac reported that in 2008 there were 2.3 million foreclosure postings – calculating to 81% increase from the previous year. This has led to a large inventory of foreclosed houses in the unsold market. Jan Hatzius of Goldman Sachs said that this trend would cause the value of house to fall by another 20% to 25% till the middle of 2010.
There are more complications. The Sunbelt states have always provided jobs and consequently homes to all those who came from colder regions. California has been the breeding ground for the soured house loans – it being the hometown of big names like IndyMac Bank, Countrywide Financial, and Golden West Financial etc. All of them have downed shutters and been taken over by others.
Borrowers who behaved irresponsibly are now angry with politicians in regions like Paramus, New Jersey. They feel it unfair that now they are being forced to help house owners in distant states who had been irresponsible. Rep. Scott Garrett (Republican from New Jersey) aptly said, “They’re wondering: Why does the person who did things right end up having to subsidize … the person across the street who maybe did buy a house that was just too large.” He is now handling innumerable complaints from the voters from his district.
Senator David Vitter (Republican- Louisiana) tried unsuccessfully to block the release of the second instalment of the bailout fund. He argued that billions being spent on helping foreclosure victims is sending out a wrong message. He categorically stated that he had “concerns about encouraging bad decisions, and folks who made good, conservative decisions having to subsidize bad decisions.”
- The Consequences of not Paying Mortgages Can be Grim
- White Plains Foreclosure Case Ruling is Sending out Stern Warnings to Lenders
- Foreclosures are Victimizing Apartment Dwellers
- Fewer Foreclosures Among Low-cost Brooklyn Homes
- What is the Difference Between a Foreclosure and a HUD Home?
- Foreclosures waiting in the sidelines have not surfaced as yet
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