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Us Homeowners Flock To Florida Event In Desperate Bid To Save Properties

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http://www.guardian.co.uk/business/2010/aug/30/us-homes-borrowers-foreclosures

In the pre-dawn darkness of a steamy night of sub-tropical rain, a queue of anxious, soggy people snakes around the palm trees outside a cavernous Florida convention centre. Some have erected camp beds or makeshift tents. All clutch sheaves of mortgage documents.

Welcome to America's biggest jamboree of delinquent borrowers. For five days, the Neighbourhood Assistance Corporation of America (Naca), a not-for-profit organisation, is working round the clock to help homeowners hang on to their houses. More than 12,000 people have signed up in advance and more than 20,000 are expected to turn up, travelling from as far afield as California, Georgia and Maryland.

"It's either feed your kids or pay your mortgage," says Omayra Delgado, a 33-year-old special education teacher whose Miami house has slumped in value from $160,000 (£103,000) to $60,000. "My home is in foreclosure. I'm trying to keep it."

Politicians' talk of an economic recovery is laughable to many of those here. This is a last, desperate bid to cling on to home ownership – the event is shrewdly named "save the dream".

Inside, hundreds of loan advisers sit behind trestle tables. They are colour-coded: Bank of America workers wear red, Citigroup are in blue and Wells Fargo are in black. Even the moribund government-supported refinancing giants Fannie Mae and Freddie Mac are here, but their budgets don't run to natty coloured clothing.

Borrowers go through orientation and financial counselling sessions. Then, for the luckier applicants who can show a steady income, the loan advisers have the power to reduce interest rates or even write off a proportion of loans.

Bruce Marks, Naca's chief executive, says this is the only way to dig the nation out of the housing morass: "What you hear from the Obama administration is 'we're helpless, our programmes aren't working'. What you hear from Congress is 'we don't know what to do so we're going to do nothing'."

Every little adjustment is crucial, because for all the White House's hopes of a swift bounce back from recession, the US property market is showing signs of renewed distress. Some 10% of US households with mortgages are behind on their payments, according to figures last week from the Mortgage Bankers Association. The percentage of people beginning to have trouble with their loans has begun to rise again, after falling earlier this year – loans that are one month in arrears have gone up from 3.31% to 3.51%. And home sales in July were down 12.4% on June, dropping to 276,000 – the lowest since records began in 1963.

Radar Logic, a property data firm, says the usual summer uptick in property prices has barely happened this year. Thousands of repossessed homes have been put on sale by banks at knockdown prices, inhibiting any vitality in the market. "The inventory of distressed property for sale in this country is just staggering," says Radar Logic's chief executive, Michael Feder, who predicts an imminent "double dip" in housing. "There's just no momentum in pricing, no momentum in inventory."

The US treasury's efforts to help borrowers aren't bearing fruit. The government's "making home affordable" programme was supposed to protect 3 million homeowners from foreclosure. But the treasury admitted this month that only 422,000 loans have been permanently adjusted so far. The rate is slipping by the month and 616,000 trial modifications have ended in failure.

This outlook is alarming. In the same way the mortgage crisis pushed America into the worst financial storm since the 1930s, a fresh collapse in housing could scupper a fragile recovery that is barely taking root in the world's largest economy. Goldman Sachs puts the chance of a double-dip recession in the US at 25%. Mark Zandi, the chief executive of rating agency Moody's, has raised his view of the likelihood from 20% to 33.3%. Nouriel Roubini, the economic guru dubbed "Doctor Doom" for his early prediction of the credit crunch, reckons the probability is more than 40%.

Damn this fragile recovery.

The best option is short term pain, the global economy can rebalance and we can then all get on with our lives, but the politicians don't want this they are determined they can keep the dream alive.

I fear it will turn into an even bigger nightmare.

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When the subsidies come off over here there will be hell to pay. The US got into HPI in a big way and we got into it in an even bigger way.

I can imagine that the Koalishon are terrified of what is to come and are doing "all they can" to prevent a panic sell off in property by keeping Merv on "vigilance" (inaction) and ordering the banks to restrain themselves from chasing late or non-pays.

A couple more months to go and we should start to see some whole number percentage drops (if anyone dare publish tghe truth) and away we go.

Sterling and stocks do not look good for Autumn as the summer sell off picks up pace.

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The US got into HPI in a big way and we got into it in an even bigger way.

Wasn't the boom of the last 10 years even bigger in the States?

We went to overpriced to ridiculously overpriced.

Whereas US went from cheap to ridiculously overpriced.

Not sure which is worse.

But what really puzzles me is why the UK has seen a modest correction (so far) in devalued £, whereas US prices have collapsed in devalued $. :huh:

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"Some 10% of US households with mortgages are behind on their payments, according to figures last week from the Mortgage Bankers Association."

Ouch! That's 10% of the ones that haven't already been forced into foreclosure. Over 30% of preowned sales in the US are currently foreclosures.

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Wasn't the boom of the last 10 years even bigger in the States?

We went to overpriced to ridiculously overpriced.

Whereas US went from cheap to ridiculously overpriced.

Not sure which is worse.

But what really puzzles me is why the UK has seen a modest correction (so far) in devalued £, whereas US prices have collapsed in devalued $. :huh:

The US had a massive boom in localised areas - California, Florida, Nevada and some localized coastal areas.

Alongside that, there was a 'subprime' bubble, giving deceptive loans to the minimum-wage/junkie demographic.

So some of the flyover states are not too heavily affected, but where there has been a bubble, it's been a pretty epic one..

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http://www.guardian.co.uk/business/2010/aug/30/us-homes-borrowers-foreclosures

Damn this fragile recovery.

The best option is short term pain, the global economy can rebalance and we can then all get on with our lives, but the politicians don't want this they are determined they can keep the dream alive.

I fear it will turn into an even bigger nightmare.

Exactly. The more they borrow to delay the correction, the worst the unavoidable correction will be.

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  • 261 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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