So…Where are we heading in this market? Countless moratoriums at the Federal and State level. Moratoriums from the banks themselves trying to work out loan mod’s. Local Judges refusing to evict homeowners., Local sheriff’s doing the same. Now we have programs like HAMP and Court decisions like National Bank v. Kesler. There is such an underpinning of resentment from the American people against not only the Banks but corporate America as well. Will this sentiment continue to stall the inevitable? I for one am of the opinion that the market must be allowed to run its course. Real estate is and always has been cyclical. Yes, this is one of the worst markets we have seen in decades but “this too shall pass”.There is a huge amount of shadow inventory the banks are holding. Release it. By all means, do loan mod’s for people who are able to, for people who were duped into loans they could not afford. Help those that we can but at the end of the day these loan mod’s are mere Band-Aids, just delaying the inevitable by a year or two. Put the homes that are foreclosed on the market. Foreclose on the homeowners that have no justifiable means to pay those notes and let the market work its way out. It will be ugly or uglier than it has already been…But we will see quicker return to normalcy. The Government would be better served by spending to create jobs so that MORE homeowners do not lose their homes.So, how do we repair it once it hits “Sea Level”?Keep interest rate levels low and keep the tax incentive for first time home buyers.Ease restrictions on investors purchasing multiple properties. (This is key to the rebuilding)Ease restrictions on homeowners who have had foreclosures and or BK’s to get back into the market.Create restrictions so Banks can no longer offer exotic loans (I hear new ARM programs are coming)There are many others but I would love to hear some other ideas.
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