My New Blog

The Fed is at least looking like they are going to do something about the interest rates.  The President and Congress are moving toward doing something about those in danger of default and helping some have a way out of a bad loan.  FHA may get involved to help some people.   And not taxing mortgage forgiveness will surely help.  Those are good signs.  Is it enough?  I think the Fed is too conservative.  A quarter point is not enough, many want at least a half point, and Donald Trump agrees with me that a full point would really help boost the real estate market.  Congress can look back and offer laws to fix a future problem, but it really can't bail people out.  That would set a bad precedent.  The only real solution can come from lenders that made the loans.  Many could renegotiate with the home owner.  Bernancke made that appeal today.  The reality is that lenders that don't renegotiate stand to loose thousands per house on foreclosure.  No one wins.  And it kills the value of properties in general which would continue to put a damper on an ailing real estate market.

The bottom line is that no one really can see an end to this situation.  It's going to take the cooperation of a lot of people.  But being timid in the response by the Fed is what we don't need.  We need an infusion of credit into the system to help real estate values.  Otherwise when people do look to refinance their homes out of these ARMS the values are not going to be there.

Bernancke, we need a more aggressive response.