Home Ownership In Record Plunge

[Purveyor]

Source: CNNMoney

January 29 2008: 10:30 AM EST

Fourth quarter saw biggest one-year drop in since tracking began in 1965 - as mortgage problems and rising foreclosures take their toll.

NEW YORK (CNNMoney.com) -- The housing and mortgage meltdown caused the biggest one-year drop in the rate of homeownership on record, according to government figures released Tuesday.

The Census Bureau report showed that home owners accounted for 67.8% of occupied homes in the fourth quarter, down 1.1 points from a year earlier. It's the largest year-over-year drop recorded in the report. The ownership rate was also well below the 68.2% ownership rate in the third quarter of 2007.

Homeownership rates, which have been tracked since 1965, hit a record high of 69.2% at the end of 2004.

The report also also showed a record 2.18 million homes vacant and available for sale in the fourth quarter, up from the 2.07 million in the third quarter and the 2.1 million a year earlier. The fourth-quarter reading on vacant homes for sale matched the previous record set in the first three months of 2007.



Read more: http://money.cnn.com/2008/01/29/news/economy/home_ownership_vacancies/?postversion=2008012910

[KansDem]

1. What is happening with these families?

Where are they going for housing? This is indeed frightening. I sense a kind of "dust bowl" scenario, but this time with no California for these people to go to!

[bdamomma]

2. terrible what is happening to these families.

I would love to see * living on the streets.

[Tight_rope]

10. The US streets are too good for the chimp....He should be in the streets of HELL!

[L0oniX]

3. They are going to stay at the SUV Hotel and the Overpass Inn.

[lonestarnot]

15. And under bridges.

[L0oniX]

17. Uhm that would be the Overpass Inn and the OnRamp Hotel

[lonestarnot]

18. Dee dee fucking dee me.

:rofl:

[lonestarnot]

19. Underpass Inn is cleaner and less crowded.

[Roland99]

7. It's the reason why apartment rents are shooting up.

[MarkInLA]

27. They can go back to renting a house or apartment...

...just like they were doing before they signed up for fantasy financing on their mortgage. They'll be fine renting for awhile - maybe even better off.

[NickB79]

32. Good luck finding a decent apartment to rent with a foreclosure on your record

I was just in the office of our apartment the other day, and the assistant was on the phone with a prospective renter. I know I shouldn't be nosy, but I couldn't help but overhear the conversation and get the jist of what was being discussed.

Basically, the person on the phone was being denied an apartment because they had been foreclosed on in the past year, and their credit score was in the gutter. You could tell that he/she was pleading with the assistant on the phone because the assistant had to keep repeating that they couldn't rent to them because of the foreclosure, it was the rules, no she couldn't bend the rules for them, she didn't have the authority to do that. When she finally got off the phone she looked like she was ready to cry.

Maybe they found a run-down apartment to rent, or maybe found a friend or family member to let them move in. Maybe they're living in their car in -10F weather.

[PassingFair]

34. Is that YOU, Barbara?

[whistle]

4. Hillary Clinton's solution for a Homeowners and Chartered Bank Foreclosure Protection Act must be

...introduced and enacted ASAP

<snipe>
FACT SHEET
Is your American Dream of owning a home at risk? Share your story with us.


Senator Clinton's plan will curb mortgage abuses, assist families facing foreclosure, and expand affordable housing to protect the American dream of home ownership. She will introduce her plan when Congress returns in September.

Crack Down on Unscrupulous Brokers:

Require mortgage brokers to disclose to borrowers that their compensation rises when borrowers' mortgage rates and mortgage fees are high. Too many prospective homebuyers believe that the mortgage broker is acting on their behalf. In fact brokers earn more when they steer borrowers to mortgages with higher rates and fees. The broker's and borrower's interests are not always aligned. Borrowers need to be aware of this when assessing the advice brokers give them. To address this need, Hillary will require that brokers disclose to borrowers how they are paid.

Work with states to develop strong licensing standards and require federal registration for mortgage brokers. Unscrupulous brokers have steered people into high cost mortgages, qualified them for loans they could not afford, and attached fees unnecessarily. These brokers are responsible for many of the lending abuses that occurred in recent years, but there is no single, national source for information about individual brokers. Hillary will establish national registration for brokers so that prospective borrowers can easily look up a broker's employment history, violations, complaints, and other information. As President, she will also work with the states to develop strong licensing standards to ensure that mortgage brokers are qualified and properly screened.

Crack Down on Mortgage Lending Abuses:

Eliminate prepayment penalties on mortgage products. Prepayment penalties, which are often used on subprime, Alt-A, and non-traditional mortgages, are a problem for borrowers. These penalties can lock borrowers into loans until the rates and monthly payments escalate. Families should not be discouraged from responsibly paying off their mortgages early, particularly when this would allow them to avoid balloon payments or high floating rates. Studies have shown that loans with prepayment penalties have a 52% greater risk of default than those without. Hillary will restrict the use of prepayment penalties.

Require mortgage lenders to include the cost of taxes and insurance in the underwriting assessment of higher-risk mortgages. Many borrowers fail to consider taxes and insurance costs when weighing whether they can afford a particular mortgage. Sometimes, lenders exclude those costs from the underwriting assessment, and in the process qualify people for mortgages they cannot afford. Hillary will require that taxes and insurance costs be included in the underwriting assessment so that prospective homeowners can properly determine whether they can afford a particular house. This requirement would apply to subprime mortgages, Alt-A mortgages, and non-traditional mortgages like interest-only, no-money-down, and payment option ARMs.

Help Reduce Foreclosures:

Establish a $1 billion fund to assist state programs that help at-risk borrowers avoid foreclosure. Hillary will establish a $1 billion fund to support state programs that help at-risk borrowers avoid foreclosure. Some state programs help borrowers make the single payment necessary to become current on their loans; others help borrowers renegotiate their loan terms, or simply provide financial counseling. These foreclosure mitigation efforts are more important than ever right now. Federal assistance for state programs that assist at-risk borrowers supplements Hillary's call earlier in the year for "foreclosure timeout." At-risk borrowers and lenders should be encouraged to work out alternatives to foreclosure.

Expand Fannie Mae's and Freddie Mac's Foreclosure Prevention Efforts. Hillary would expand the goals of Fannie and Freddie, the government sponsored enterprises (GSEs) that help stabilize the mortgage markets, to include helping a larger number of at-risk homeowners avoid foreclosure. This would be consistent with Fannie's and Freddie's existing goals that promote home ownership. The GSEs already help mitigate foreclosures by enabling some borrowers to swap into less risky, lower-cost loans. Fannie also helps homeowners arrange payment forbearance, financial counseling, and loan restructurings. Hillary will expand those initiatives to make foreclosure mitigation a greater priority.

Expand Affordable Housing:

Establish a $1 billion fund to provide federal support to housing trust funds established by state, county, and municipal governments. The rise in home prices over recent years, coupled with stagnant wages, has meant that people are committing an increasing share of their salaries to mortgage payments. Between 2001 and 2004, for example, the number of households paying more than half of their incomes on housing increased by 1.9 million. The Joint Center for Housing Studies estimates that housing is a "severe cost burden" for 15.6 million low- and middle-income households. Families facing such strains often forgo necessities. Other families simply forgo home ownership, or turn to high risk, alternative mortgage products. In order to encourage the development of affordable housing, Hillary will establish a $1 billion fund to support state, county, and municipal housing trust funds. Housing trust funds generally use dedicated funding sources to support initiatives like building subsidized rental housing and safety net housing, and they also support nonprofit housing developers. Hillary's fund will supplement the funding states, counties, and municipalities have already dedicated to these initiatives.

The plan announced today supplements the plan Hillary announced earlier this year to address the problems in subprime mortgages. In that earlier announcement, Hillary called for expanding access to independent face-to-face counseling; restricting prepayment penalties for subprime mortgages; requiring "plain-talk, no-fine-print disclosure"; promoting "foreclosure timeout" in which at-risk borrowers and lenders work out alternatives to foreclosure; and strengthening the Federal Housing Administration so that it could provide more homebuyers with an alternative to the subprime market.

<link> http://www.hillaryclinton.com/feature/mortgage/

[bobalew]

13. She forgot to address the Main cause of this mess:

Mortgage servicer abuse. The People who you end up with, when you have a sub-prime loan, that service your loan, process your payments, etc., are PIGS! they use every illegal means available to force you into foreclosure, 'cause that's where they make the bulk of their money & fees. Here's a couple of links, about it, and you can just google " Mortgage Servicer abuse", and get an eyeful of what's happening under the radar and under our noses. Funny thing, though, If you visit John edwards' suite, He mentions this. I won't imply anything, but it is strange that the main impetus behind the sub-prime crisis,appears to be ignored by hillary. Lets' help get her informed on this, and I suggest that you inform yourselves about it, too.
Regards, Bob
http://mediaserver.prweb.com/pdfdownload/360824/pr.pdf
http://www.fanniemaefoundation.org/programs/hpd/pdf/hpd_1503_Eggert.pdf
http://www.mortgageabuse.com/archives/cat-mortgage-servicing.html

[lonestarnot]

16. Damn that John Edwards is on top of every one of their games isn't he!

:applause:

[SpiralHawk]

5. "Pull yourselves up by your own apron strings. Smirk." - Rebublicon homelander fatcats

"All you need is a good dose of koservative kompassion. Smirk."

- Republicon homelander fatcats

[ixion]

6. *'s "ownership society"... yet another catastrophic failure

just like everything else he's ever touched.

[Javaman]

9. Read my tag line. :) nt

[ixion]

11. turning everything he touches into sh*t

exactly.

[FarCenter]

14. "ownership" was a catastrophi fraud

Having mortgage greater that the value of the home means that you have no equity -- hence no ownership.

[Tempest]

8. Another Bush accomplishment

The first president in modern history to see a decline in home ownership during his administration.

[krkaufman]

12. Probably true if adjusted for population growth ...

... but are we actually back to pre-January 2001 levels of home ownership?

Some indications from the article...

The report shows that 2.8% of homes not in the rental market now sit vacant, matching the record high, also from last year's first quarter. That's nearly twice the rate of vacant homes that were on the market during the first quarter or 2001, just as the economy was heading into its last recession.

"For some perspective sake, this measure never topped 1.9% until the housing bubble started deflating," said Mike Larson, a real estate analyst with Weiss Research.

The ownership rate was well below the 68.2% ownership rate in the third quarter of 2007. Homeownership rates, which have been tracked since 1965, hit a record high of 69.2% in the second and fourth quarters of 2004.

[The Backlash Cometh]

20. Let's keep outsourcing those jobs. Sounds like a winning idea.

Dumb ass Republicans.

[jgraz]

21. Winning for the Republicans

At least the rich ones...

[The Backlash Cometh]

23. I think they're freaking out too, actually.

Remember, not every clod in America had access to killing fields. So, now their neighbors are freaking out, and if the "rich" have their money in real estate, I know they're scared shitless too.

You want to hear something funny? These white wisemen are pumping up their communities in the oddest way, trying to even make a winning record in a high school sport a selling point to draw in families with children. But the reality is that these Republican communities are hardest on children. They hate them. They don't want to provide public services for them like parks and recreation areas that are truly open to walk ons and heaven forbid if you have a dog. They're allowing all the open areas to be gobbled up by selected adverse possessions, cutting down on the areas where you can go off the beaten path for a little adventure walk. And all of this was planned, because the community development wizards assumed that if they only built wealthy houses, that they wouldn't have to provide public services because the wealthy would take care of their own and keep to themselves. And, guess what? The communities are so hostile that that's precisely what's happening. Nobody is bonding with the city. Everyone just pays and creates their own little world and tries their best to avoid their neighbor. Community development my ass. This is a huge mortuary waiting room.

[Skittles]

24. awesome observation

I've noticed something strange about the McMansions where I live - the cars are there but I never see the people - ever - not walking in the neighborhood or talking to each other - it is quite bizarre

[The Backlash Cometh]

26. The incredible disconnect.

And it all started with Community Development planning. They intentionally built upgraded communities thinking it would be cheaper for the city because they wouldn't have to provide public service for rich people. They say as much in their Comprehensive planning. I paraphrase, but they say that rich people don't need public services or recreational areas, because they will carpool their kids out to take private lessons somewhere else.

And cutting back on public service is a priority in the Republican plan to minimize the need for government. So they create hardships for families, especially those who live in private developments. One of the biggest oversights is public transportation for school age kids, particularly for the middle schooler and high school age group, because they figure the rich will carpool, or buy the kid a car. And that is indeed what is happening, cutting down on the number of kids using buses. But it is a hostile way to push people out of the nest, and people don't forget. This is all negative PR for the City and they don't even realize it. The City becomes a source of negative experiences and those that can afford it, minimize their interaction with the community because of it.

But what the asshat City people don't see, is the hardship this is creating for everyone. People buy homes based on those services. If a single parent can't be sure their kid will get transportation to school, they won't buy in the area. But the morans don't see this.

Recreation is worse. Far worse.

They cut down on public paid recreation, making it too expensive for families with children to figure out how to keep their kids busy AND interacting with kids in their own community. And all the white haired men in the community wonder why all the families with young children are moving out of state. Florida is being built for the old, not the young.

And the poor construction of these McMansion developments on private streets behind private gates is a scandal waiting for a competent newspaper reporter. I'm not talking about the houses. I'm talking about the infra-structure. The City has allowed them to be built with below minimum quality. Actually, "minimum" is the key word. It might be better to say that communities built in public areas are built with "better than minimum requirements." That's how they get around it. Linguistics. They have designated different building codes for private versus public communities. Public communities actually get better quality streets and retention ponds. These McMansion dwellers don't have a clue that they paid big bucks for a community that will be a maintenance headache down the road.

But you can see what happens over the long run. They move out quickly once they figure it out. So the community churns, and never sets roots. You have old people left, wondering where the young men are that can help them during times of crisis, like hurricanes. They've moved to another state where their wives and children are happier.

This is what a Republican community creates for themselves. And all the white haired men sit around sucking on their cigars, drinking their Scotch Whiskeys and wonder where the money people went. Why aren't young working families buying in their hostile, poorly designed communities?

[Skittles]

31. OMG

Backlash you have answered so many questions that have been hounding me - recently I saw a well-dressed guy holding a huge sign outside a McMansion development saying TALK TO ME BEFORE YOU BUY HERE - I am kicking myself for not talking to him - he's probably simply on to the scam before it becomes readily apparent. I wanted to ask him what prompted people to buy such crap in the first place.

In my previous apartment building it was 8 units and it still wasn't as big as one of the houses I watched being built across the street. I could not believe how fast they went up - as a night worker I was concerned about the potential noise but I SWEAR they finished a house a week!

[The Backlash Cometh]

35. If you ever get a chance to talk to him, PM me.

Someday, I might be the one holding the sign.

[Skittles]

38. I recently moved but am still in the same area

I can easily swing down that road and check it out - specifically the sign said "Talk to me about how Pulte (sp? - housing folk?) treated me before you buy here".

[The Backlash Cometh]

41. That's pretty specific.

Sounds like a housing construction issue. If you get a chance, and the guy wants to talk, well, why not? I would like to find out how the streets and the retention ponds were built. If it's a public road, it's probably not going to be an issue.

[Yuugal]

37. Yeah, listen to this dumbass repuke

Who wants to give every last high paying job in America away.

http://www.youtube.com/watch?v=AOW0cUaGWZU&feature=related

http://www.youtube.com/watch?v=UhLBSLLIhUs

"Don't forget she went to India in June '07 and took $2 million from NASSCOM, India's IT lobby."

[MilesColtrane]

22. America you've been pwned!

Put the Ownership Society on the same scrap heap as the rest of Bush's promises: No Child Left Behind, no nation building, uniting, not dividing, spreading freedom, etc., etc., etc.

[lancer78]

25. This is the reason

I bought a mobile home. 2432 SQFT on 2 acres for only $75,625. My monthly mortgage is $648.43 over only 15 years. I could work at McDonalds and keep up the payments on that thing. Maybe if folks had bought mobile homes instead of homes they couldn't afford, we wouldn't be in this mess right now.

[Demeter]

29. Not a Good Option in Tornado Country, My Friend

Nor in the high heating regions...

[Greyhound]

40. I was looking at them about 2 years ago, and I have to say I'm impressed.

While I wouldn't want to be in one in a tornado, the places I looked at were relatively inexpensive, better built, used superior materials, were far better planned, and much tighter than the flood of McMansions that were thrown up.

Buy some land, pour a foundation and drop a manufactured house on it. You could even build a basement if tornadoes are really an issue.
:hi:

[dipsydoodle]

28. The US sub-prime crisis in graphics

The US sub-prime mortgage crisis has lead to plunging property prices, a slowdown in the US economy, and billions in losses by banks. It stems from a fundamental change in the way mortgages are funded.

How it went wrong :

Traditionally, banks have financed their mortgage lending through the deposits they receive from their customers. This has limited the amount of mortgage lending they could do.

In recent years, banks have moved to a new model where they sell on the mortgages to the bond markets. This has made it much easier to fund additional borrowing,

But it has also led to abuses as banks no longer have the incentive to check carefully the mortgages they issue.

http://news.bbc.co.uk/1/hi/business/7073131.stm

On the diagram you need to tick the "How it went wrong" box before and after to see the changes. IMO that's a sound model to explain what's occured. Those antics have in many respects screwed the world and as such the USA is unlikely to receive much sympathy from outside.

[NashVegas]

30. Of Course, This Has Nothing to Do With Home Prices That Tripled And Then Some

While wages stayed flat.

[closeupready]

33. OF course not. Why would anybody think that?

?? lol

[Zynx]

36. When did home prices triple?

[Skittles]

39. triple an exaggeration but the increase was staggering

WAY beyond the real value of a freaking house - it's what enabled simple-minded idiots to use their houses as ATMs.