The banks, brokerage houses, insurance companies and automakers all got theirs, so why shouldn't homeowners? Clark's talking, of course, about the government plan for a federal bailout of some 3 million homeowners who are delinquent on their mortgages.
This is the first
truly organized attempt to assist those facing foreclosure. The fairness issue aside, this is an effort to provide some level of base support for homes around the country. A foreclosure will reduce the values of neighboring homes by around 1%. That's partly because banks do such an atrocious job of managing real-estate owned properties (REOs). The idea of providing a bailout to homeowners is to do a cram-down, with the loss split between taxpayers and the bank. We'll see how it works out on the ground.
The reality is that we have too many houses. The best guesstimates put the figure at anywhere between 3 million to 10 million houses. So we have a ways to go before we burn through that excess. But housing markets that have been going down in value will start to stabilize. It took us several years to get into this mess and it will take us several more to get out.
Be sure to
vote in Clark's poll and let him know what
you think!
