Lakewood Ranch, FL Blog

Apparently, we have learned nothing.  There are a number of reasons for the housing meltdown but clearly one aspect of the mess was the government's requirement of lenders to make loans to people who had no business getting into loans they couldn't afford.  To no one's surprize, many of those loans have gone into default.

So, what should we have learned from this?  Make sure people really can afford the homes they purchase and the loans they take to get them, right?  Anyone?  Anyone?  Well, not so fast.  The USDA (the people who inspect meat?) backs a loan product for lenders that doesn't require any downpayment for the purchase of a single family home.  Funding for these loans is running out but Congress is working to generate new funding for these loans by increasing fees.  If this was limited to farming-related property or was limited to military members and first responders, I guess I wouldn't have a problem with it.  However, as I understand it, the product can be used to purchase property in such rural areas as....Lakewood Ranch.

I am a Realtor so obviously I am for anything that responsibly puts people in homes but I am also a citizen of the US who cares about my country's future.  I hope that Congress learns from the banking fiasco we've been through and smartly works to eliminate the loopholes found in programs like this one.  Otherwise, they are swapping one mess for another.

I often hear from buyers that prices are likely to stay down because there is "another wave" of foreclosures on the horizon. I'm not sure from where this information originates but I've heard the same thing myself on the various news and business news TV shows.  That's why I was very interested to read an article today that said the share of homeowners behind on their mortgages fell in the first quarter, the first drop in four years and a possible sign that the foreclosure crisis has peaked.

The portion of mortgages that were delinquent 30 days or more fell to 6.57 percent in the first quarter from 6.60 percent in the last three months of 2009, according to Equifax and Moody’s Economy.com.

That’s a drop of about 16,630 delinquent loans and, though modest, it is the first decline in the delinquency rate since early 2006.  I am not an economist but I look at that and I see yet another sign of a turn around.  If we really have peaked with foreclosures (and it must happen sometime) we will finally begin the process of relieving the downward pressure on market values and that, combined with the evidence we are seeing now of increased market activity in terms of sales and pending sales, should eventually equate to reduced inventories and higher prices.  Maybe not great for buyers but really great news for those who are underwater and struggling.

No doubt there are still many hurdles to overcome before the economy turns around and (if I may politically editorialize for a moment) government MUST stop spending like there's an unending source of money out there but I'm beginning to think that the light at the end of the tunnel is no longer a gorilla with a flashlight!