When Will Mortgage Crisis End?

[falcon]

The mortgage crisis did not end when congress passed their bailout bill last week and sneaked out of DC untilnext year. More bailouts will be required. The mortgage crisis will end when home prices start rising. Millions more folks will loose their homes as adjustable rate mortgages reset.

http://news.yahoo.com/s/ap/20081005/ap_on_bi_ge/financial_meltdown_credit;_ylt=AgjCvvlf4JpbKgtc11f oL4Ws0NUE

NEW YORK - Washington's financial bailout plan is now law. So the credit spigot will start flowing again, banks will resume lending, and an economic recovery can begin, right?


[/align]Wrong. Experts say the most important thing that needs to happen before the $700 billion bailout even has a chance of working: Home prices must stop falling. That would send a signal to banks that the worst has passed and it's safe to start doling out money again.

The problem is the lending freeze has made getting a mortgage loan tough for everyone except those with sterling credit. That means it will take several months or longer to pare down the glut of houses built when times were good "” and those that have come on the market because of soaring foreclosures "” before home prices start appreciating.

[James B]

I don't think the bailout will help one bit in the long run. For one thing, housing prices have to return to a sane level at they have been grossly over valued. The cost of a home has to be within the price range of people who need a place to live instead of being a product for speculators. People were buying housing and trying to make big profits in a short turn around time. This only works for a while until the home cannot possible return that kind of income. At that point, the person with the mortgage is screwed and most brought it on themselves.

[falcon]

I don't think the bailout will help one bit in the long run. For one thing, housing prices have to return to a sane level at they have been grossly over valued.

+1

That may take a few years.

[oldelkhunter]

http://www.youtube.com/watch?v=_MGT_cSi7Rs&feature=related



I used to live in Florida and I will give you an idea of how property value rose and dropped for a 23 year period.

I lived 1/4 mile from the beach . The town I lived in had a lot of saltwater canal lots that fed into the intercoastal waterway. in 1985 you could buy a lot for 15k for building a 200 k house. In 1989 that same lot was 85k and the house was slightly more but not much more. In 1995 when I left you could buy that same lot for 25k because people had overspeculated on them and the bottom fell out. In 1998 that same lot was 100k . In 2001 that lot was 500 k and the house construction prices had gone up 50%. The house I built in 1986 cost 128000 and is currently valued at 450 k. There is no rhyme or reason to home pricing. There is a large inventory of houses there and a lot of them are from overseas investors Russians, Germans and the Brits. WHen people feel comfortable to buy once again and the talking heads on MSM are not bringing down the economy like they have every day for the last 2 years maybe people will start snapping up bargains and this thing will blow away. I think for the most part it is fixed with the bailout provided the monies are used wisely. We do have Pelosi and Reid in charge with the spectre of Nobama being the president. I'll bet anyone dollars to donuts that if Obama gets in there will be no mention of the economy or layoffs.

[Fieldmouse]

The problem is the lending freeze has made getting a mortgage loan tough for everyone except those with sterling credit.

Best news I've heard all day!!!!!!!!!!

[DougMD]

I'll bet ACORN and Obama are ticked. I wonder if they will charge racism over this credit issue, no longer lending to people with bad credit for zero money down?