To hope or not to hope
Is HOPE NOW helping much? Depends on whom you ask.
HOPE NOW, the alliance of mortgage industry players focusing on foreclosure prevention, says it's helping quite a bit, thanks. In a press release yesterday, it estimated that "more than 1.7 million homeowners have avoided foreclosure because of industry efforts" in the last 12 months. That includes 170,000 in May alone.
But the Center for Responsible Lending fired back with a press release of its own that says the numbers "greatly overstate the help being provided" and fail to note that the problem is worsening rather than improving:
[O]ver 16 percent of subprime loans were “seriously delinquent,” that is 90-days or more delinquent or in foreclosure, at the end of March. This is double the 8 percent rate from one year earlier and the highest on record. Furthermore, though defaults on subprime loans continue to drive the overall housing crisis, prime loans are also faltering, with the percent of seriously delinquent prime loans more than doubling from a year earlier.
Foreclosure prevention has been such a hot topic not only because many homeowners are behind on their mortgages but also because rising foreclosures hurt neighborhood home values, government budgets and the lending industry.
Comments
All these stories about helping those in trouble. How about the other side of that coin?
Here is an example of the egregious greed of sellers. WBAL ran a story about a couple in Owings Mills who are raffling off their house. It was on the market for 1 year and didn't sell. They're asking $370,000 for a house that cost $186,000 just 8 years ago.
It didn't sell because they're asking too much!! Don't these people get it?
Here's the link to the story:
http://www.wbaltv.com/news/16783269/detail.html
Now if they go into foreclosure, I won't shed a tear. They should have sold their house for a reasonable amount, not tried to gouge any buyers.
Posted by: Anon | July 3, 2008 6:12 PM
Jamie, I find it highly suspect that 1.7 million have been helped by HOPE NOW. Didn't their original numbers estimate as many as 500k saved from foreclosure war their original goal?
If this is 1.7million is total people across the country that fell behind and avoided foreclosure, I'd believe it, with a few questions:
1) Does this include "Jingle Mail" and Deed in Lieu?
2) Is this including people who managed a short sale and still owe big bucks to the bank without collateral backing now?
3) Is this including properties banks have chosen to not foreclose on because they've got a rental or maintenance agreement with the current/former owner?
Posted by: Jonathan Benya | July 4, 2008 5:41 PM
Good questions, Jonathan. Housing counseling groups and other organizations have complained that it's not clear what "helped" means. There is some breakdown by category on the press release (i.e. repayment plans and loan modifications), but the advocacy groups say the repayment plans and loan mods offered aren't necessarily helpful.
Posted by: Jamie Smith Hopkins | July 4, 2008 6:31 PM