Ben Jones' Housing Bubble Blog is full of news today about the continuing losses on Wall Street and some politicians' homeowner bailout plans.
Megan McArdle, a blogger for the Atlantic, today resurrected an article by Holman W. Jenkins, Jr. of the WSJ. His article suggested that homeownership might not provide a financial panacea for low-income households:
"A typical low-income household might spend half the family income on mortgage costs, leaving less money for a rainy day or investing in education. Their less-marketable homes apparently also tended to tie them down, making them less likely to relocate for a job. . . . For the sake of people trying to climb into the middle class, let's hope that one lesson will be a rethinking of policies designed to saddle them with money pits."Megan McArdle then writes under Housing: a blessing or a curse?:
"Yes, housing has performed very well over the last few decades, but a lot of that increase stems from a serious of idiosyncratic factors that will not be repeated:The rise of the long term amortizing mortgage after World War II, which pegged prices to monthly incomes The long fall in nominal interest rates after Paul Volcker got serious about inflation The increase in the value of the mortgage income tax deduction Ever-rising demand from the baby boomers as they move through their life cycle--a trend that is about to halt, if not reverse."
7 comments:
Harriet, check out this article about a service that you pay to help you walk away from your home
"Sometimes, they say, walking away from your mortgage makes economic sense, especially for homeowners who find themselves "upside down" — that is, they owe more on their mortgage than their house is worth. In those cases, "voluntary foreclosures are not by themselves evidence of a newfound irresponsibility on Americans' part," says Nicole Gelinas, writing in The Wall Street Journal . "
That wont work in Virginia - the bank will sell your property at a massive discount and come after you for the rest.
All good points.
An economy cannot recover from a downturn if its workers cannot move to where the jobs are.
For information on what one can and can't do:
http://realestateinvestingtax.com/shortsale.shtml
It isn't quite as simple as some imply.
"That wont work in Virginia ..."
So, you're saying that all first mortgages on homes in the state of va are recourse loans? That's news to me.
I already posted it :
LINK
Post a Comment