Studies say mortgage modifications ineffective, foreclosures will continue, prices will drop

The Wall Street Journal overviews a series of studies on foreclosures, mortgage modifications and home prices.

Of 7.7 million mortgages behind in payments, they are estimating 5 million will end up in foreclosure, in spite of home mortgage modifications.

most efforts to modify loans with easier terms will delay, not prevent, the loss of homes to foreclosure

It's also fairly pocketed in certain areas. The top cities are listed below, along with their months of shadow inventory. Shadow inventory, because it's not on the actual market, can temporarily raise home prices due to less supply available. Yet that unsold inventory is waiting in the wings. It is actually being kept off the market through other means.

  • Stockton CA - 27
  • Orlando, FL - 27
  • Miami, FL - 24
  • Las Vegas, NV - 18
  • Phoenix, AZ - 15

Past analysis has given a 15% further price decline but it's interesting how pocketed certain disaster markets are.

Moody's is currently forecasting an 8% home price decline for 2010.

Moody's talks about the failure of home mortgage modifications, especially the HAMP program, but notice how all analysis is about foreclosures, the failure for people to keep up with payments.

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Predatory Lending

Predatory Lending is a major contributor to the economic turmoil we are currently experiencing.

Here is an example of what I am talking about:
Scott Veerkamp / Predatory Lending (Franklin Township School Board Member.)

Please review this information from U.S. Senator Jeff Merkley regarding deceptive lending practices:
"Steering payments were made to brokers who enticed unsuspecting homeowners into deceptive and expensive mortgages. These secret bonus payments, often called Yield Spread Premiums, turned home mortgages into a SCAM."

The Center for Responsible Lending says YSP "steals equity from struggling families."
1. Scott collected nearly $10,000 on two separate mortgages using YSP and junk fees. 2. This is an average of $5,000 per loan. 3. The median value of the properties was $135,000. 4. Clearly, this type of lending represents a major ripoff for consumers.

Predatory Lending

Re: Predatory Lending

Please review this information regarding the National Association of Realtors and the "Code of Ethics."