Foreclosure Help Too Late For Michigan
Posted on June 5, 2008
Filed Under Foreclosure Homes | Leave a Comment
While doctors squabbled over the course of treatment to be taken the patient is well beyond help. This is the case of Michigan. Foreclosure help has come too late for Michigan. After much hue and cry, squabbling and debating the foreclosure rescue plan has come through but it will help only a fraction of those in need. This will be done at the cost of billions of dollars being dragged out from federal budget.
The plan is dependent on the voluntary coming forward of the lender. They have to agree to lower the loan to 85% of the market value of the unit. This raises a big question mark about the sincerity of the effort to help the house owners about to lose their shelter. Perhaps the patient has already died.
There is no doubt that the plan will be of little help to Michigan. It involves the owner waiting for houses owned by banks to get new buyers. Then only will buyers and sellers get the message that the foreclosure crisis has peaked out. Buyers will wait for the market to fall further before investing. On the other hand sellers will not put their units up for sell to compete with the discounted price of repo homes being sold at auctions.
The federal government measure is vague about those whose equity has dropped and cannot refinance because the loan amount is greater. A strong argument against helping reckless borrowers is that they will repeat the practice if given indulgence. But what about the case of Bears Stearns when the Federal Reserve came forward with billions to help a careless investment bank? While the damage went on Congress hummed and hawed. Another pertinent question is about those suffering now being helped, without thinking about the heads that had rolled at the start of the crisis. The law should be equal for all for all times.
Congress members, irrespective of their party loyalties, are afraid about the music they will have to face in their own districts if they do not do something fast. Against this background Michigan can go on hoping with the rest of the others that the real estate market will ultimately find its level and make a turn around. Houses will start getting buyers and only then will things stabilize. Meanwhile the blame game goes on while scammers fish in troubled waters making it murkier.
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