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It appears that enough people are finally starting to realize that stopping or slowing the foreclosure landslide will have positive impact on the free-falling real estate values in many areas. While there have not been many foreclosures, here in the hamptons, growth is inevitable and this policy could help.
In coffee shop convetsations about this issue, I’ve also heard people say “Well, what about me? I’m not in default on my loan. Why should my neighbor get help and me nothing?” And the answer is another question: “What will happen to the value of your home if your neighbor goes into foreclosure and the house sells at a fire-sale price?” They usually “get it”…
FDIC plan synchs with real estate industry aims
By Matt Carter, Monday, November 17, 2008.
“Limiting foreclosures not only slows growth in inventory and price declines, but provides reassurance to would-be homebuyers who are reluctant to buy into a downturn, Bishop said.
The administration’s plan, which FHA Commissioner Brian Montgomery said might help “hundreds of thousands of borrowers,” involves a streamlined loan modification process in which borrowers’ loan payments would be reduced to 38 percent of gross monthly income by lowering their interest rate, lengthening the term of the loan, or reducing principal and adding it to the back of the loan.”
click the title above for complete story.
Sag Harbor, NY resident Harry Hurt writes books, stories and the Executive Pursuits column for The New York Times. Much thanks to Harry for sharing on this personal level. See the entire piece after the quote.
“I happened to be in the throes of a divorce, the marital equivalent of foreclosure. Although I had accepted an all-cash offer for the house from an ostensibly wealthy couple, the buyers had recently postponed the closing date to get the money to complete the purchase by selling some stock. Given the downward trend in the Dow Jones industrial average, I was starting to worry that the sale might fall through.
The prospect was chilling. If I was unable to find another buyer or a year-round renter, my house might end up in foreclosure. And I had already signed a one-year lease on a two-bedroom walk-up apartment near the center of the village, which meant there was no turning back on my move out of Chateau Bow Wow.”