Foreclosures a Bigger Political Issue Than You Think [Housing Tracker]

Quote of the Day

“We still have two million more people that need to go through this process. That’s like the entire town of Tampa going through foreclosure.” - Cheryl Lang, president of Integrated Mortgage Solutions, a company based in Houston that helps mortgage lenders take hold of foreclosed homes. Nearly 3% of homes that were once occupied by their owners in the country were vacant in March, the highest since the Census Bureau began publishing the number in 1956. (NY Times, May 27th)

Foreclosure Data

Pawlenty May Veto Minnesota Measure; On McCain Ticket? “The Minnesota legislature's passage of a housing bill has created a dilemma for… Gov. Tim Pawlenty, a Republican seen as a potential running mate for John McCain. The Minnesota Subprime Borrower Relief Act would allow borrowers to defer foreclosure sales until one year after the measure takes effect. It applies to some subprime and negative-amortization loans… The governor has criticized the plan to defer foreclosures and has said he would be inclined to veto it. He has until Monday to decide… HousingLink, a Minnesota nonprofit affordable housing research group… projects a 39% increase in foreclosures in the state this year, with perhaps 28,000 households affected.” (Wall St. Journal, May 28th)

Shuttered Homes, Thriving Wildlife. Northeast: “In neighborhoods across the region… in thousands of homes emptied by foreclosures, the combination of a rainy spring and a flood of the unkempt houses has local governments increasingly concerned about public health... As more people move out, the grass grows taller, the water puddles up and the wild things move in. Mosquitoes thrive in the empty swimming pools and junk piles that have been filled and refilled by the recent rains. Ticks flourish in the tall grass. So do rodents... Then come the snakes, with the rest of the animal kingdom not far behind.” (Washington Post, May 27th)

Foreclosure Fuels Sales Bounce In Hard-Hit Areas. “WSJ: "Home sales are rising in some U.S. metropolitan areas where lenders have slashed prices on foreclosed properties." DataQuick Information Systems: In California's Sacramento County, sales of single-family homes totaled 1,669 in April, up 41% from a year earlier… The median sales price was $226,250, down 34%. Alan Wagner, president, Sacramento Association of Realtors: The rise reflects more aggressive pricing by lenders. "They've got to liquidate inventory. They're taking that house and dropping $100,000 off the price, and all of a sudden they've got multiple offers… Some homes that sold for more than $400,000 a couple years ago now go for $225,000-$260,000,” Wagner says." (LA Times, May 26th)

Kansas City Tackles Problems Of Vacant Homes. “City officials estimate there are 6,000 abandoned homes, many of them in the urban core. But experts say the number is more likely twice that high… Traditionally, [Kansas City’s] solution was to knock them down… often leaving neighborhoods with acres of empty lots strewn with garbage and overgrown with weeds, making blight worse. Now, city officials are… trying to save these old homes and salvage neighborhoods [by] developing [old homes] into potentially valuable housing stock. Nathan Pare, [KC] manager of dangerous buildings: While the city demolishes at least three houses a week, Pare said, inspectors find hundreds more.” (Kansas City Star, May 26th)

Providence Tallying Houses Lost To Foreclosure Crisis. “Providence, Rhode Island city inspectors: “From January 2006 through the end of April, there have been more than 1,500 foreclosures in the city. The city's trying to get a better picture of what that means in neighborhoods were former owners have been forced from their homes -- or simply packed up because they could no longer afford payments. Mayor David Cicilline also hopes to use the tally to push for an "abandoned property penalty" on property owners, including banks and financial institutions that allow houses to remain empty.” (Boston.com, May 25th)

Dear Readers: Read anything you liked on this subject and didn't see it here? Why not post a link or a quote from the article in our comments section. Share the wealth! - Ed.

Get Seeking Alpha's housing market coverage by email -- it's free and takes only seconds to sign up.

Comments

[unimpressedpragmatist]

This subject is becoming more political but not in the way framed by this article. Those who entered into mortgages they knew they could not afford and, eventually, would lose their new homes, have lost the sympathy of the American taxpayer and the electorate. This became the situation when Congress, in its infinite stupidity and propensity to pander in an election year, decided to interfere in the dynamics of the market, and use taxpayer money to bailout these morons and deadbeats.

If the issue is political, it is the negative reaction to the bailout, using the fiscally responsible taxpayers’ and homeowners’ money to pimp for votes. Although, the people of this nation may feel a modicum of sorrow for those losing their ill-gotten homes, they realize that these irresponsible, looking for something for nothing, temporary homeowners would, eventually, lose them through their inability to control their spending far beyond their means.

This ill-advised and useless spending of the taxpayers’ money has exacerbated the anger of the electorate toward Washington. Therefore, there will be a backlash in November but not because of foreclosures. It will result from the anger of the electorate against the clowns who believe they are capable of performing the duties of members of Congress.