ABC 7 News has a video and article on "ordinary" resellers being affected by foreclosures in Prince William County. The newscaster calls the foreclosure problem "a by-product of the mortgage crisis." A better way of explaining the problem to their viewers might be to say "a by-product of dodgy mortgage lending."
One of the communities hardest hit by the foreclosure problem, Prince William county, isn't just having an impact on those who default on their mortgages, but those trying to sell their homes.
After nearly 40 years of memories in a home that is paid off, Larry and Diane Shandor are struggling to sell their house now, because of others in their neighborhood who can't pay their mortgage.
"How can you compete with a foreclosure home," said Larry Shandor. His problem is an unfortunate byproduct of the mortgage crisis; those trying to sell homes in a market flooded with foreclosures.
. . .
Pable Cava priced his home to compete with the foreclosures and finally sold it after months on the market. "I just had to get rid of it. My wife was sick."
The Shandors had to do the same - reduce the selling price of their home. "What can you do? It's just what's happening right now."
5 comments:
Wall Street Journal: U.S., Banks Near A Plan to Freeze Subprime Rates.
-This is disgusting, unfair, despicable and an insult to responsible and sensible citizens and the free market system.
-dcandout
From Minyanville today:
"The problems are now so huge that it does not matter what the Fed does with interest rates. Asset prices are dropping like a rock even though the stock market has not yet gone down for the count. With the enormous leverage in the system, credit and capital is being destroyed at a very fast clip and it will be destroyed at an even faster clip once the stock market and corporate bond market head south in a major way. Both will.
A key point in this mess is that the Fed cannot provide capital (drop money out of helicopters), all it can do is provide liquidity. However, liquidity is not the problem here, solvency is."
I feel bad for these Sellers in PWC (it's happening in Loudoun & Fairfax too, ANY neighborhood that has a foreclosure in it !!)
The Foreclosures become the COMPS for the neighborhood after they FINALLY sell!
Flashback to '88 in the South House next door to us sold on the courthouse steps for 45K
We'd paid 80K three years earlier
Did I learn my lesson - heck yeah - sold here in '06 and THANK GOD EVERYNIGHT we did!!!
Anyone who thinks this can't happen again is fooling themselves!!
Harriet:
"...However, liquidity is not the problem here, solvency is."
Others like Nouriel Roubini have also said so, and that is true in the long term. But if banks and the Treasury collaborate on such an action, it will delay the inevitable fall in home prices. And such delays are bound to cause problems to those who have waited patiently for sanity to come back to the market.
Well you they dont bail out the loan holders and extend their teaser rates, we will all see state and property tax rates 2-3x higher than last year to make up for the shortfall.
You see, some of the biggest investors in those bleeding SIVs are state and local governments.
If you still think its fair that they lose their homes, be forewarned that YOU will be paying for it with YOUR checkbook!
Personally, I say keep the teaser rates. Ive got some mutual funds that are taking a horrible beating right now myself - Ive lost 30k from my retirement money in the last few months.
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