Yesterday afternoon, I sat in on a conference call about covering the foreclosure crisis. But it wasn’t so much a lesson in foreclosure journalism (if there’s such a thing) as it was a discussion of where we are in the now four-year housing crisis with a dash of speculation as to when we might get out of here.
The answer? Not anytime soon. Here are some of the issues we’ll be dealing with in the next year or two:
1. Falling prices. It looks like 2011 will include home price declines in several major areas of the country, including parts of California, Arizona, Nevada, Florida, and Illinois.
2. More foreclosures. While we’ve waited for the much-promised HAMP and HARP programs to live up to the government’s breathtaking promise to save 4 million homeowners from foreclosure, the government announced that just 750,000 families were saved from “homelessness” through these programs. The real number, I think, is lower. Meanwhile two million families a year over the past few years have lost their homes to foreclosure.
3. It pays to put you into foreclosure. The shadow inventory of future foreclosures is growing and BIG SURPRISE!!!, it turns out that it’s really in loan servicers’ best financial interest to put you into foreclosure so it can tack on huge fees and charge you for its own homeowners insurance policy that costs several times what yours costs.
4. The future of Fannie Mae and Freddie Mac. In January, 2011, the government is supposed to put forth a new plan that outlines what we’re going to do with Fannie and Freddie, the secondary mortgage market behemoths, and a framework that explains how we’re going to securitize loans and reassure the world about the strength of the U.S. homeowner so that they’ll buy our mortgage-backed securities (MBS). But guess what? No one knows what to do about Fannie and Freddie, and no one wants to do anything while the housing industry is so fragile. My guess is that the government will have to push this back, perhaps into 2012.
Life is full of surprises, so we’ll see if the housing industry can muster up something more than a lump of coal for itself this Christmas.
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