Middle GA Homeowner

How Rational Discrimination Affects Unemployment and Foreclosure Rates

The author fails to take into account the very real reduction of home values in the past two years. Two years ago many of the homes in foreclosure had substantial equity in them, now due to the economic contraction those same homes are valued at quite a bit less. He also seems to think that by merely putting a "For Sale" sign on a home with equity, that it will magically sale. Wish that were the case. Many homes throughout the country have been on the market for a year or more and despite reductions in price, have not sold. Much of the problem lies with banks' inability or unwilllingness to lend to even stellar credit applicants. Finally, when the distressed homeowner is involuntarily unemployed with no source of income and has a home sitting with a "For Sale" sign that doesn't sale, the result is simple --Foreclosure.

The esteemed writer fails to see that side of the issue, blaming instead the problem on people who bought more house than they could afford. There is possibly some truth to that thesis, but the concept while being deceptively simple is fatally flawed.