Homebuyer tax credits expired in mid 2010.Government-sponsored mortgage modifications provided limited help. In 2011 we face continued foreclosure issues.
Reviewing My No.1 Theme for 2011: Home prices will resume a decline that began in mid-2006. We had the homebuyer tax credits expire in mid-2010, and government-sponsored mortgage modifications provided limited help. In 2011 we face continued foreclosure issues including questionable documentation, and banks have a record high Other Real Estate Owned (OREO). OREO is up to $53.2 billion at the end of the third quarter, up 338.2% since the end of 2007. Depressed home sales are being sold at a 30% to 35% discount, which reduces property appraisals at the county level. Homebuilders will have to compete with these lower prices and we need a mortgage modification program for all Americans, not just those at risk of losing their homes. QE2 (quantitative easing) is not working and US Treasury yields are higher, causing mortgage rates to rise. “The Great Credit Crunch” began with housing, and that foundation needs repair before Main Street can recover with sustainable job creation.
