CNN Money provides an insight into just how much our tax dollars are doing to help people avoid foreclosure
If HOPE for Homeowners, the foreclosure-prevention plan passed last summer, was a soft drink, it would be New Coke. If it was an automobile, it would be an Edsel. A movie? Howard the Duck.
In the five months since it has been in effect, HOPE has helped exactly one homeowner to avoid foreclosure. This despite Congress having made $300 billion available to back these loans and estimating that the program would benefit as many as 400,000 families.
This is no surprise to me or most readers. We cannot fix the fundamental problem of too much household debt when the reason for foreclosure is simply an upside-down house.
I predict that even if we took the ludicrous action of simply depositing money into the bank accounts of those in foreclosure, they would rather spend that money on consumer products or pay off non-house debt because the asset the loan is secured against is worth less to than what they owe on it for the forseeable future; in SoCal possibly decades absent significant price, income, and asset inflation; something that seems unlikely for a while in the midst of a generational deleveraging and rising taxes at the present time.
Check out this weed infested yard that is bank owned. . .
“Weed-iriffic” Rolling Hills Bank Owned Chula Vista
http://www.youtube.com/watch?v=0Lie5oSH3jI
It’s sad to see that the HOPE program hasn’t lived up to its potential.
As per the last paragraph – I remember hearing, years ago, that if you took a rich person (self-made, not old money) and gave all their money to a poor person (someone who has grown up in generational poverty), that within a few years time, both of them would be right back where they started.
At the time, I thought it was a ludicrous idea. Now, as I observe people more and more, I realize that this just may be the case.
For the most part, people have an incredible amount of control over their financial lives. Most simply make very, very, very bad decisions.
It seems that those of us that grew up in a time when paying off one’s debt was the right thing to do are now weathering this storm much better than those who do not…
Great subject!
people are complainin..
Try living in FL everybody is walking away from there home and buying the bank owned one next door for half price…