For those of you who watch the stock market — it has been betting that housing has bottomed recently — and has some valid reasons to think so. A couple of the key drivers of the housing crash—fraudulent underwriting and massive job losses, took place years ago and most likely have already done their worst for home prices.
That still leaves us with the mortgage credit crunch and the backlog of foreclosures, which may add another million foreclosures over the next 2 years, on to of the 2 million unsold homes now. These numbers come from the Federal Reserve, who is clearly out of patience with the housing bottleneck. Fed Chairman Ben Bernanke started the year by presenting a menu of housing fix solutions to Congress. (Read the full report here.)
The newly issued “white paper” is a cry for further action, reminding lawmakers that the housing crash wiped out $7 trillion in household wealth and half of the overall home equity. “Continued weakness in the housing market poses a significant barrier to a more vigorous economic recovery,” Fed staffers noted.
They offered a variety of ideas designed to “help moderate the inflow of properties into the large inventory of unsold homes, remove some of the obstacles preventing creditworthy borrowers from accessing mortgage credit, and limit the number of homeowners who find themselves pushed into an inefficient and overburdened foreclosure pipeline.”
The Fed white paper explains how our current “protect taxpayers from further short-term losses” risk is ending up penny-wise but pound-foolish. It also makes clear that, while the administration has eased opposition to restructuring delinquent mortgages a bit this fall, there’s much more that can be done. The Fed just called our current adminstrations problem for missing the forest for the trees, and undermining taxpayers’ long-term interests besides, by resisting measures to unclog the mortgage market.
The problem is now crystal clear: millions of American homeowners have become renters in the last few years, driving rents significantly higher after a two-year stall in 2009-2010. At the same time, many of the properties they lost remain vacant because credit is not available to put them in the hands of new landlords. (Read More about our Renter Nation here.)
The same credit crunch has also disqualified millions of Americans from buying the homes made more affordable via the low interest rates, on top of the 12 million homeowners stuck with underwater mortgages. So while demand for rentals has been brisk, the millions of pending foreclosures threaten to do more damage to home prices in the absence of a credit easing and wider restructuring.
With this report by our Federal Chairman, the ball is now in Congress’s court, then it will be up to our President and Bernanke to get the right things done and get our housing market out of the slow lane, and into the fast lane of recovery.
What are your goals for your investing business for 2012? What’s happening in the housing and foreclosure markets now and what changes should you make to your investing business for 2012? These questions and more we will answer in my first Live Strategy Session Webinar and Call this Wednesday “Make Your New Years Resolution a Reality” at 6pm PDT, 9pm EST. Here is what we are going to discuss:
*What are your financial goals for 2012? How many deals do you want to close? How many calls will you need to make? How many motivated seller needs will you need to generate?
*Where will you find the most motivated sellers, who are eager to unload their properties at wholesale prices to investors right now?
*How will you organize your daily and weekly tasks to better work your leads, so you never miss a deal?
*How much money do you need to raise? How many money partners will you need to find? Where will you find them?
*What steps will you take at the first of the year to assure you reach (and exceed) your 2012 foreclosure investing goals?
The answers to these questions will make or break your success. If you want to assure your 2012 is your best year ever, you must attend my “Make Your New Years Resolution a Reality” live interactive strategy session call. Those six questions and more will be covered Live on this Strategy Session Call only. Call 800-310-7730 x2 or click here for details.
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