moratorium on foreclosures and the effect on DC Real-estate market . (Manassas: real estate market, rental) - Northern Virginia - Virginia (VA) - City-Data Forum

tigger37708 · 10-08-2010, 07:34 PM

Congress is now considering a moratorium on foreclosures.
Presumably to straighten out the sloppy processes of mortgage holders during the foreclosure process.
Stewart Varney thinks this will kill the Real-estate market and seriously impact the economy.
I am wondering what impact this will have on near term real-estate prices.
On the one hand Foreclosure properties being removed from the market reduces the availed inventory and demand could go up for the remaining homes on the market. Pushing prices higher.
On the other hand this is not a market driven phenomenon. It is governmental action which will result in a backlog of foreclosed homes. Savvy buyers might realize that any temporary boost in prices could be totally wiped out when the flood gates are opened and all these foreclosed homes hit the market in a year or two.
But then again alot of the nicer areas in Northern Virginia may not be impacted by foreclosures.
What are your thoughts?

Denton56 · 10-08-2010, 08:22 PM

Let the market work! Things get screwed up when the government gets into things like this. House prices need to come down, foreclosures are a way to help that happen. Now prices will go up, because of fewer houses available. What about all those poor people who were hoping to buy those foreclosures?! This is a terrible idea. Let the market work! Why oh why must this government take over everything?! Why must they control everything in our economy? Their meddling hasn't worked yet, why do they think it will this time? It won't.

pseudo · 10-08-2010, 08:47 PM

It's a little too late to 'let the market work'. And if you consider the market 'working' prior to the government intervening in 2008 to save all of our astronauts, I'd say you were living in a pipe dream. It is not a free market anymore. You are assuming that the players in the free market are 'playing clean', and they are not. Both parties are guilty of muddying the waters. But, here we are, all SOLs because the government sat back while everyone and their dog was able to buy a house.

When you are fired from your job do you sit back and give a chuckle "Well hot dawg, look at this free market system at play! They did not need me anymore cause they were able to find X cheaper to produce in X. I love the free market system. Now where do I go apply for UI?"

CAVA1990 · 10-08-2010, 08:54 PM

Quote:

Originally Posted by tigger37708

Congress is now considering a moratorium on foreclosures.

Source please. This sounds like misinformed speculation akin to "Congress is considering legalizing marijuana".

Fighter 1 · 10-08-2010, 08:56 PM

Quote:

Originally Posted by pseudo

It's a little too late to 'let the market work'. And if you consider the market 'working' prior to the government intervening in 2008 to save all of our astronauts, I'd say you were living in a pipe dream. It is not a free market anymore. You are assuming that the players in the free market are 'playing clean', and they are not. Both parties are guilty of muddying the waters. But, here we are, all SOLs because the government sat back while everyone and their dog was able to buy a house.

When you are fired from your job do you sit back and give a chuckle "Well hot dawg, look at this free market system at play! They did not need me anymore cause they were able to find X cheaper to produce in X. I love the free market system. Now where do I go apply for UI?"

Banks sold homes that they didn't have the Title to , they had already sold the papers on the open market , they were only the collection agency It would also appear from the News report that Bank of America says they may have sold houses that they didn't foreclose properly (Illegal action ) and Title company's issued title insurance when in fact the titles were not clear of all liens. So much for all those great deals on repo homes.

Tiger Beer · 10-08-2010, 09:42 PM

Stalling foreclosures temporarily is simply a way to protect homeowners looking to sell. It's also a way to protect bank assets and banks bottom line worth...as they are taking enormous losses on all of their many bad loans.

However, the same problem is still essentially there. Houses are too high relative to income/salaries, and people will continue to lose their house and need to foreclose.

I'm not a homeowner looking to sell, so of course I would prefer everything to just break down to its proper values and have everything priced the way it should be.

Most likely the government will try to stall and resist housing prices falling to their real and proper levels. Basically, a way to save bank's bottom lines. However, in the long run, the banks will ultimately lose anyways, it is just slowing the losses to badly bleeding rather than immense bleeding.

bmwguydc · 10-09-2010, 12:30 AM

Please remember that this is the Northern Virginia forum. As such, discussions of the topic at hand must be locally relevant. Discussing proposed national legislation, without any discussion of the local real estate market, is a topic for another forum. Thank you.

ChristineVA · 10-09-2010, 05:33 AM

I think it needs to happen. One Bank of America employee admits to "robo-signing" approximately 8,000 foreclosures in one month--meaning he never even looked at the paperwork. The stalling is going to force the banks to go back and review these transactions and future transactions. There could be many instances where people were not properly foreclosed on or should not have been foreclosed on. Quite frankly, I am SICK TO DEATH of this shark mentality that we have been living with from the financial institutions for too many years.

Getting ON topic here, I honestly don't think homes are overpriced in this area right now. They seem right where they should be. The problem is, borrowing a term that another poster so eloquently pointed out, they aren't letting everyone and their dog buy a house today and you can probably only afford a house if you have a decent paying job. The people in *this* area who are being foreclosed on aren't necessarily victims of unemployment as the numbers are low here. They are victims of buying at the top of the market in 2005/2006, getting a "teaser" fee loan, thinking they would flip the house, and then getting caught up in that. Just two weeks ago there was an article in the paper about the Manassas area neighborhood that has one of the highest foreclosure rates. When they interviewed the people in foreclosure I could not BELIEVE they were allowed to purchase the homes in the first place. While I do blame our financial system mostly for this, there is some personal responsibility on the part of the consumer. I mean, I knew in 1994 that I could have bought a house in Springfield but the montly mortgage was about $600 out of my comfort zone, so I didn't do it and moved to Wooodbridge instead. I was being financially conservative and I knew better than to overstep that comfort zone even though the bank would have lent me much, much more money than I thought I could afford. So, in many ways, I don't have too much sympathy for these folks. All of these bad decisions, in turn, have affected my ability to sell my own home. It just stinks all around.

If there is some shady business going on with the foreclosures, I think it needs to be stopped. I'm just really tired of the banks trying to stick it to the little guy at every turn.

Caladium · 10-09-2010, 05:40 AM

IMO this affects Nova a lot less than most other areas of the county, since foreclosures aren't really a major factor in our real estate market (yes, every community has a few, but not even close to the same degree as elsewhere).

It would make me nervous about buying a foreclosure, I suppose.

Caladium · 10-09-2010, 05:56 AM

Quote:

Originally Posted by tigger37708

On the one hand Foreclosure properties being removed from the market reduces the availed inventory and demand could go up for the remaining homes on the market. Pushing prices higher.

I doubt that would be a problem here. Homes being sold by the owners determine the market. It conceivably could push the price of rental property higher if more people decide to rent instead and wait this out.

Quote:

Originally Posted by tigger37708

Savvy buyers might realize that any temporary boost in prices could be totally wiped out when the flood gates are opened and all these foreclosed homes hit the market in a year or two.

Nah, we've been hearing posters say this for years now. It's wishful thinking, but the flood doesn't happen. All that happens is the banks sit on the properties and release them slowly over time.