From the Record:
Late mortgage payments rise in N.J.
Nearly 11 percent of homeowners with subprime mortgages in the Bergen-Passaic region were at least 60 days behind in their payments in February, a congressional report released Wednesday shows.
That’s up from less than 6 percent two years ago, and makes the region one of many around the country where loans on the brink of foreclosure have risen sharply.
Statewide, subprime delinquencies over 60 days grew by 5.8 percentage points, to 12.5 percent, over the past two years, according to data compiled by the firm RealtyTrac for the Joint Economic Committee. Lenders typically seek foreclosures when payments are more than 90 days overdue.
Foreclosures and delinquencies will grow even more this year, the committee predicted, as short-term teaser rates expire on adjustable-rate mortgages and homeowners unable to afford monthly payments rising by as much as 50 percent find they cannot refinance because they owe more than their home is worth.
The country faces “a tsunami of foreclosures” unless Congress acts quickly, said Sen. Bob Menendez, D-N.J., who criticized lax government regulators and greedy mortgage brokers.
“The animal instincts of the marketplace took over,” Menendez said at a news conference with fellow Democrats, Sens. Charles Schumer of New York and Sherrod Brown of Ohio. All three serve on the Senate Banking, Housing and Urban Affairs Committee, which they said would be developing a package of solutions that includes a federal subsidy program to help prevent foreclosures.
…
“Even if your home is not in danger, when homes are foreclosed around you, property values drop,” Schumer said. He said the Joint Economic Committee, of which he is chairman, estimated a single foreclosure lowers the value of a home on the same block by about $3,000, and the effect is cumulative, so three foreclosures on one block would lower the value of other homes by $9,000.
“Even if your home is not in danger, when homes are foreclosed around you, property values drop,” Schumer said.
That’s correct Senator. This correction, however, is completely necessary to return affordability to the housing market and ensure the long-term health and viability of the economy, even if it means some pain over the short term. Without a correction, many of your constituents in expensive markets like Long Island simply won’t be able to afford housing. What will become of Long Island’s economy if the next generation simply can’t afford to live there?
What is the alternative, Mr. Senator, to a correction in housing prices? Pricing out first time buyers forever? Or, do we simply build on the Ponzi scheme of ever dropping lending standards and ever more creative mortgages, this time with government subsidies thrown into the mix?
will they help with car payments for people who spent too much on a car?
To hell with the car loans, can I get some kind of state assistance to help me pay for a 60″ Plasma?
jb
We all believe that if we can support Iraq,we can help a few Americans that got in over their heads with home debt
I want state/federal goverment to pay my student loans!!!
I lost $800 investing in eToys in 2000. Where’s my bailout?
Grim: Plasma is SOO 2005.
Grim: Plasma is SOO 2005.
Just like real estate… Fitting, isn’t it?
jb
Come on, Grim, there’s NEVER been a better time to buy or sell your plasma TV!
If we use tax dollars to keep house prices artificially high, then we have to use tax dollars to build more subsidized “affordable” housing. Then we have to also pay all the adminstrative costs of these conflicting programs and hand out more no bid contracts to political contributors. It’s like the government is trying to find a way to waste the most money possible!
#4 Pete: A few Ameircans? Watch and learn my child.
I am glad to see the Gov’t do something to help the “little guy”..for a change.this should support home prices as well
If we use tax dollars to keep house prices artificially high, then we have to use tax dollars to build more subsidized “affordable” housing
Maybe we could just move to a Soviet style system. The government owns all housing. You get on a waiting list for POS cape. Those loyal to the Politburo would be rewarded with colonials in towns with midtown direct access.