By Carla Ghosn (mycaal.com)
Based on a promise made by President Obama, he is “going back to the drawing board” as it relates to investigating and employing strategies that are effective at reviving the dormant housing market. That being said, the president also added that the housing crisis facing America can’t be remedied by any sort of government program. According to the president, the constant dip in the housing market has not yet reached a stage where it’s bottomed out. A number of economists have predicted that the lowest point in the current recession will not be reached until the middle of 2012 at the earliest.
The fact of the matter is that it’s very difficult to gauge at precisely which moment the bottom of the housing market plunge has been reached. These kinds of downturns can and do last for many years, and taking a look at the degree to which home prices have fallen is not necessarily an indication of what future home prices are likely to be. No matter how far prices have fallen, if enough buyers haven’t yet been tempted to take the bait and invest in real estate, the prices are likely to fall even further. Price “stability” was achieved as a result of the government’s homebuyer tax incentives. However, those incentives are no longer in place, and the stability of prices has therefore been compromised.
At a recent White House function the president responded to a number of questions which had been posed via Twitter. He admitted that he was not adequately prepared to face the economic challenges that he had inherited from the preceding administration in the beginning of 2009. Obama stated that he failed to understand the severity of the crisis because the majority of economists failed to understand it themselves. In his own words, one of the things he would have done differently was to do a better job of communicating the fact that the economic challenges facing the nation were not going to be disappearing overnight.
The president made a point of defending efforts on the part of his administration to secure mortgage modifications for homeowners desperately seeking to hold on to their homes. He did acknowledge that it was a complex process given the characteristics of the securitization market. Obama stated that there are many lenders who do not hold mortgages and it therefore a very intricate process attempting to determine who owns what.
The president expressed the desire to connect responsible homeowners with competent lenders who are able to provide them with meaningful support. For this reason, his administration will forge ahead with its intention of establishing and implementing federal loan modification strategies. If done correctly, the end result should be one in which both the homeowner and the lender benefits from the modification process.
About Carla Ghosn
I am the CEO and founder of mycaal.com focused on helping the consumer save their home, save their dream. If you need help with your loan modification, please visit us at www.mycaal.com to see how Caal can help you make your home affordable again.