Home Prices Continue Falling

   According to the monthly report known as S&P Case Schiller Home Price Index home values have continued to decline through January 2011 leaving many experts wondering when we may see some signs of stability in housing. The reasons the bleeding has not stopped are obvious.

The overall economy is directly affected by the housing crises. Many jobs are eliminated, retail sales are slower and confidence in the economy is lower than it needs to be in order to sustain any economic recovery. As I've indicated in several previous blogs, an economic recovery may not be possible without a housing recovery. The ripple effect as housing prices continue in a free fall provides no positive influence in the lives of so many people dependant on a healthy real estate market.

Political posturing has resulted in a parade of failed programs at taxpayers expense. The administration promised many things but delivered on virtually none. The creation of Home Assistance Modification Program or HAMP promised to save millions of Americans from foreclosure. "It will give millions of families resigned to financial ruin a chance to rebuild" President Obama said "it will shore up housing prices". Congress set aside $50 billion for foreclosure prevention and the administration projected that 3 to 4 million homeowners would benefit from loan modifications. To date only a small fraction of those numbers have been realized.



By catering to lenders unwilling to provide any necessary mortgage financing to qualified borrowers the government has shown that it's allegiances are most certainly to the biggest contributors to political war chests and not to so called "main street" Americans. Companies servicing mortgage loans are mostly large banks who regularly lose paperwork and quite possibly advise homeowners to do things that may not be in the best interest of the homeowner. Banks deny many who actually qualify for modifications. In some cases lenders may approve a modification only to proceed with a foreclosure filing, misleading the homeowner. These types of tactics are designed to keep the homeowner paying something while the lender pursues the foreclosure action.

Government official haven't gone after, fined or otherwise cracked down on lenders for not complying with programs that they benefit from. Unwilling to flex it's muscle against the deep pockets in the banking industry none of the promises or projections have materialized.

In order to understand the relationships between government and banks we can take a look at Fannie Mae and Freddie Mac. Two Government Sponsored Entities that together hold most of the financial risk involved with mortgage defaults, were appointed by the Treasury to oversee the banks and the foreclosure prevention programs that the administration rushed into place. Obviously not my idea of an independent overseer. In fact Freddie Mac filed documents stating that imposing penalties may "negatively impact our relationships" noting that some of these are our largest source of revenue in mortgage loans. Well, that may say it in a nutshell. Housing and the economy will struggle until we fix what's wrong with the system. That may require putting people in place who truly have nothing monetary to gain.



Save on Thousands of Pet Supplies!

Americans Homeless

I've made a business out of finding homes for families in South Florida since 1990. The plight of homeless people was never a concern to me because my business requires that you either have a home to sell or that you want to buy one. Whenever I'd see a homeless person begging I was skeptical. I'd rationalize in some way that I needed the dollar more than them or that they really weren't homeless. I'd even named one guy "Scammer Johnny". 

Lately I've witnessed  growing numbers of new homeless people. Families losing their homes to foreclosure as a result of  unemployment, the economy or just being victim to predatory lending which ultimately caught up to them. 

I'll try not to point fingers here simply because I'd like to focus my attention on the homeless in America and not the reasons for the seemingly continuous growth in their numbers. Although counts seem to vary greatly by state, there seems to be an alarming number of homeless families and children showing up at shelters all across the country. In order to provide some measure of the homeless population, the government relies on data supplied to the Department of HUD, obtained from more than 400 volunteer organizations and outreach programs nationally. There's probably a better way to find realistic numbers but again I'll not point any fingers.




Accordingly, there are varying numbers of "sheltered" homeless people or those who have temporary housing provided by shelters, churches and various volunteer organizations and the "unsheltered". Those who live in the streets, under bridges, in cars, hallways, cardboard crates, makeshift back alley communities, parks and so many other areas not meant for human habitation. According to HUD's national counts 4 in 10 are unsheltered. These folks may be more vulnerable to illness, drug abuse and crimes like robbery, rape and murder than their counterparts. All homeless folks are constantly at risk of catching a disease or a parasite, falling victim to drugs and alchohol which inevitably results in health problems, or of being raped or murdered. The unsheltered are just more likely to face these circumstances. The homeless have no safe harbor. They all lack any feeling of security. Imagine being assaulted in broad daylight and not a person around helps. That's what a homeless person faces every day. That and trying to eat in order to face another day.
 
Homlessness today is an effect of the economy. People become homeless because they don't have sufficient financial resources to maintain their housing, although some may like to believe that it's a result of psycological and social inadequacies. The challenges that people face financially in today's America are significant. Joblessness, increasing tax burdens, higher energy costs, tougher credit standards, lack of affordable health care and the level of housing costs are all contributing factors to the growing numbers of homeless in America. As our homeless population increases our middle class decreases. The level of poverty in the country is beyond reasonable. The gap between the have's and have nots is widening. Putting a face on homelessness and poverty is not easy. It may always be a part of the fabric of society. Eliminating homelessness may not be realistic or possible either, but allowing it to grow is just as unrealistic and just as unreasonable.

Watch the Video

Can we make a difference? I don't know. When I see "Scammer Johnny" or his freinds begging these days I'm less pessimistic. I give him a buck if I have one to give. I think about families that have lost homes. About Moms and Dads who lost jobs. I think about so many people struggling to get by another day. Struggling to keep the home that they worked half their lives for in order to give their families a safe and secure place to come home to. I wonder as an American how we let these things continue. I give a little when I can and I hope that somehow it helps.
             
According to Wikipedia a homeless can be described as an individual who lacks a fixed, regular, and adequate nighttime residence or an individual who has a primary nighttime residence that is a public or private place not designed for, or ordinarily used as, a regular sleeping accommodation for human beings. 



George Sinacori
GES Real Estate, LLC