Obama is President. The Democrats have bullet proof majorities in both houses of Congress. Under Obama and Democratic reign, the banks are borrowing from the government creation of the Federal Reserve at 0% interest.
Deposits get 100% guarantees from the US Treasury.
Fannie and Freddy are controlled by the Democrats. The current losses at Fannie and Freddy are over $500 billion.
The Fed has been buying up mortgages by the hundreds and hundreds of billions. The TARP has pumped in over $700 billion to the banks.
Obama had a plan and promised what would happen with his plan. Listen to Obama in his own words about what was to happen.
How has that been working you say? Obama has big plans and promises for health care. How do you suppose that will work out?
Foreclosures May Rise to Record 3 Million U.S. Homes This Year
January 14, 2010, 04:14 AM EST
By Dan Levy
Jan. 14 (Bloomberg) --
A record 3 million U.S. homes will be repossessed by lenders this year as high unemployment and depressed home values leave borrowers unable to make their house payment or sell, according to a RealtyTrac Inc. forecast.
Last year there were 2.82 million foreclosures, the most since RealtyTrac began compiling data in 2005. More than 4.5 million filings are expected this year, including default or auction notices and bank seizures, said Rick Sharga, senior vice president for the Irvine, California-based seller of default data and forecasts. There were 3.96 million filings in 2009.
“This will be the peak year, and the main reasons are unemployment and house prices that have stabilized way below mortgage amounts,” Kenneth Rosen, chairman of the University of California’s Fisher Center for Real Estate and Urban Economics in Berkeley, said in an interview.
Government and lender efforts to keep people in their homes are failing to relieve the worst foreclosure crisis since the Great Depression. Unemployment was 10 percent in December, unchanged from the previous month, while the so-called underemployment rate that includes part-time workers and discouraged workers rose to 17.3 percent from 17.2 percent, the Labor Department said Jan. 8.
U.S. lenders permanently modified 31,382 mortgages, or 1 percent, of the 4 million loans targeted under the Obama administration’s foreclosure prevention plan through November, the U.S. Treasury Department said last month. Fewer than half of the 3.2 million homeowners estimated as eligible for mortgage relief by the Treasury actually qualify, according to Herb Allison, assistant secretary for financial stability.
“The government doesn’t have their act together on housing,” Rosen said. “They seem to be pussy-footing around. We need a much more robust effort.”
Obama’s loan-modification program is “destined to fail” because it doesn’t confront the problem of negative equity that is driving foreclosures, Laurie Goodman, senior managing director at Amherst Securities Group LP, told Congress Dec. 8. Homeowners with negative equity, where a property is worth less than the loan, have little incentive to keep paying the mortgage and will “strategically default,” Rosen said.
The Treasury will release updated and “much different” statistics tomorrow, spokeswoman Meg Reilly wrote in an e-mail. More than 728,000 borrowers have already received an average $550 reduction in monthly payments, giving them “a second chance to stay in their homes,” she said.
An $8,000 first-time homebuyer tax credit and a $200 billion lifeline to keep mortgage buyers Fannie Mae and Freddie Mac solvent are among the administration’s efforts to date that have supported the housing market, she said.
“Modifications will not be the solution for all homeowners and will not solve the housing crisis alone,” Reilly said.
The number of homeowners with negative equity totaled 10.7 million, or 23 percent, at the end of the third quarter, according to a Nov. 24 report by First American CoreLogic, a Santa Ana, California-based real estate research firm.
Home prices probably fell 13 percent in 2009 to a median of $172,700, following a drop of 9.5 percent the previous year, Walt Molony, a spokesman for the National Association of Realtors, said in an interview. Prices are down 26 percent from the July 2006 peak.
Defaults among prime borrowers are likely to accelerate, adding to a “huge” inventory of properties that banks possess and haven’t yet put on the market, according to Robert Shiller and Karl Case, who created the S&P/Case-Shiller Home Price Index. In September, Goodman estimated that 7 million homes were already in foreclosure or likely to be seized.
The housing market is weighed down by a “a massive supply of delinquent loans” that will end up in foreclosure this year, James Saccacio, RealtyTrac’s chief executive officer, said in a statement today.
The end of the government’s tax credit for first-time buyers, scheduled to expire in the spring, and the end of the Federal Reserve’s $1.25 trillion purchase of mortgage bonds, may add to housing woes, Rosen said.
A total of 2,824,674 U.S. properties got at least one foreclosure filing in 2009, a 21 percent jump from the prior year and more than double the number in 2007, RealtyTrac said.
About 2.2 percent of households received a filing last year, according to the company, which sells default data collected from more than 2,200 counties representing 90 percent of the U.S. population.
December filings increased 15 percent from a year earlier to 349,519, the 10th straight month the tally surpassed 300,000. Foreclosures in the fourth quarter jumped 18 percent from the same period in 2008 and fell 7 percent from the third quarter.
Nevada had the highest foreclosure rate for the third straight year in 2009, with more than 10 percent of households receiving at least one filing. December filings fell 22 percent from a year earlier and rose 27 percent from November.
Arizona had the second-highest rate for the year as more than 6 percent of households got a filing. Florida was third at 5.93 percent, followed by California at 4.75 percent and Utah at 2.93 percent, RealtyTrac said.
The other states among the 10 highest rates were Idaho at 2.72 percent, Georgia at 2.68 percent, Michigan at 2.61 percent, Illinois at 2.5 percent and Colorado at 2.37 percent.
California, Florida, Arizona and Illinois accounted for more than half of the U.S. properties that got filings in 2009, RealtyTrac said. California led with 632,573 homes receiving at least one filing, up almost 21 percent from the previous year. Filings increased almost 9 percent from November.
Florida had the second-highest total with 516,711 properties, up 34 percent from 2008. Filings in December rose 4 percent from the previous month, according to RealtyTrac.
Arizona had 163,210 properties that got at least one filing in 2009, up almost 40 percent from 2008. Illinois was fourth at 131,132, up almost 32 percent.
Other states in the top 10 were Michigan at 118,302, Nevada at 112,097, Georgia at 106,110, Ohio at 101,614, Texas at 100,045, and New Jersey at 63,208, said RealtyTrac.
--With assistance from Kathleen M. Howley in Boston, Jody Shenn in New York and Bob Willis and Dawn Kopecki in Washington. Editors: Kara Wetzel, Rob Urban
To contact the reporter on this story: Dan Levy in San Francisco at +1-415-617-7077 or firstname.lastname@example.org.
To contact the editor responsible for this story: Kara Wetzel at +1-212-617-5735 or email@example.com