Sub-Prime Crisis Leading to Recession
By Kurt O'Keefe, Attorney at Law on Dec 4, 2007 in Benefits of Bankruptcy, Chapter 13 Bankruptcy, Michigan
The Federal government is now paying attention as freezing rates on Adjustable Rate Mortgages is pushed as an option by Treasury Secretary Paulson.
In remarks, a full transcript is linked to above, yesterday, Paulson acknowledged the difficulty of getting all the players on the mortgage side on the same page, with servicers, securitized trusts, their pooling and servicing agreements, it is a problem just getting someone with authority to make a deal on changing the terms of a mortgage.
There is a new hotline to call if you are in trouble with your mortgage, even if you are current but facing a reset on your ARM, 1-888-995-4673.
The housing numbers grow to crisis proportions.
Over the past 3 months, new home sales are down at an annual rate of 30%. Median home prices, down 13% from last year. Sales of completed new homes are down 11% from last year, but inventories are up 14%. This results in the highest inventory to sales ratio in 12 years.
In simple terms, it takes longer to sell each house, meaning more are for sale at any given time, further depressing the market. The government is jawboning, talking a lot, as Paulson claims 50% of homeowners in trouble never even contact their mortgage company about foreclosure alternatives. So we have a hotline, and lots of letters and press releases, about the hotline.
Many, if not most, of my clients, cannot get a live body when they call the mortgage company, so I distrust those statistics.
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