In a recent article titled The GOP Candidates on Foreclosures: A Study in Mush
Written By David Weigel and Posted Wednesday, Oct. 19, 2011, on Slate online, GOP candidates could not come up with a proper answer to the foreclosure crisis facing the country. In a recent debate when asked direct questions about the issue, most could not articulate a solution or at least realize were the problem is coming from.
It’s a sad day in politics when the number one problem facing our economy is not completely understood by potential future administrators of the largest economy in the world. Our elected officials need to have a firm understanding of the current situation before they can even attempt to fix it.
Our current economic climate is a result of over inflated expectations as to future gains in the real estate market. The source of the problem stems from not regulating how loans were issued and issuing loans to individuals that were not qualified. In the latter part of the real estate meltdown bankers became even more bold and made even riskier loans such as (no income no asset) NINA and (stated income stated asset) SISA loans. These methods of qualifying individuals for loans backed fired and in great part gave rise to the ballooning in home pricing.
Where are we today and how can we move forward from here? It’s really simple, most economist agree that the best way to resolve these issues is to sell off the inventory and create a floor for home pricing. Government can help by making laws creating an incentive for banks to fire sale homes and get rid of the inventory. Streamline the process for loan modifications and short-sales should also create more stability in the market.
Written by: Hector A. Pena, Esq.
Written By David Weigel and Posted Wednesday, Oct. 19, 2011, on Slate online, GOP candidates could not come up with a proper answer to the foreclosure crisis facing the country. In a recent debate when asked direct questions about the issue, most could not articulate a solution or at least realize were the problem is coming from.
It’s a sad day in politics when the number one problem facing our economy is not completely understood by potential future administrators of the largest economy in the world. Our elected officials need to have a firm understanding of the current situation before they can even attempt to fix it.
Our current economic climate is a result of over inflated expectations as to future gains in the real estate market. The source of the problem stems from not regulating how loans were issued and issuing loans to individuals that were not qualified. In the latter part of the real estate meltdown bankers became even more bold and made even riskier loans such as (no income no asset) NINA and (stated income stated asset) SISA loans. These methods of qualifying individuals for loans backed fired and in great part gave rise to the ballooning in home pricing.
Where are we today and how can we move forward from here? It’s really simple, most economist agree that the best way to resolve these issues is to sell off the inventory and create a floor for home pricing. Government can help by making laws creating an incentive for banks to fire sale homes and get rid of the inventory. Streamline the process for loan modifications and short-sales should also create more stability in the market.
Written by: Hector A. Pena, Esq.
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