Interesting article, seems like July 28th may be a day of reckoning for mortgage servicers……but I doubt it. Geithner has summoned them all to D.C. ala Hank Paulson last year to let the servicers know they are doing a poor job. Unfortunately it was Geithner who lobbied for rule changes that allow the servicers and banks to act the way they are (mark-to-market, see previous post). This article does a good job showing that the current round of loan modifications isn’t actually happening and when it is, it isn’t working. Expectations are for 3.5 million foreclosures over the next year.
The mortgage crisis is worse today then it was a year ago and if smart ideas are employed sooner rather than later it will be worse a year from today.
Having said that, prices have fallen in some places to a point where it makes sense to buy, but that assumes the buyer can withstand a further potential drop in prices. A good example, in my neighborhood I can buy the same home as mine, but with a pool for 55% less than what I paid, its actually now a reasonable purchase.
Scott Dauenhauer CFP, MSFP, AIF