Just about everyone in the world was affected by what happened in September of 2007 when the credit market virtually collapsed. The US government stepped in with a stimulus package of $870 million that was supposed to fix the problem. All it did was kick the can down the road. Many Americans ended up filing bankruptcy and losing their homes to foreclosure in record numbers. As the crisis was continuing, the government followed up with loan modification programs that didn't work, another failed stimulus, QE1, QE2, "the twist" and now QE3. The number of Americans filing bankruptcy and losing their homes to foreclosure continued to increase all the way through the end of 2010. Then everything went flat. In fact, there was a slight decline in the rate of foreclosures and bankruptcy filings. Many experts pondered this as the economic numbers were not improving, but these numbers were declining.
Bankruptcy Attorney Tucson, Personal Bankruptcy Attorney, Bankruptcy Lawyers In Delaware,
There are a couple of theories about the foreclosure numbers and why they have gone down. Up until 2010, there was a steady increase. Something funny happened when bankruptcy attorneys started contesting the foreclosures in court. The banks were being required to prove the chain of the deed. When everything was going crazy five years prior, thanks to buying and selling loans on the derivatives markets and no one really knew who owned what. While banks are doing diligence, they were losing in court, forcing them to go back to the drawing board and spend time doing diligence before foreclosing on a piece of property. Prior to 2010, a foreclosure would take about six months. After the crisis, it now takes close to a year. And then there is the other theory. Many people believe that banks know that it is not wise to flood the market with foreclosures. It will only drive the prices of homes down even further costing them more in losses. If they could push them out slowly as they sell, they can have it controlled decline.
Recently, the Fed Chair, Ben Bernanke announced that he would continue to lower the interest rates through 2015 to record lows. It was reported that he also is encouraging Federal Reserve backed banks to make home loans more freely to Americans. Isn't that what happened that got us in this current huge foreclosure mess. The Fed encouraged financial institutions to loan to just about anyone and when interest rates began to rise, surprise, no one could make their payments. This news came on the back of the announcement of QE3 which allows the Fed to use quantitative easing to buy back $40 billion worth of securities for months.
In order to have any kind of housing recovery, you need to have employed Americans that make a good wage. Over the last four years, the median household income in the US has declined. And unemployment is staying right about 8%. The only reason people aren't sitting at the bankruptcy attorney waiting to file for bankruptcy is because creditors are pushing money into the market and getting Americans further in debt. If the credit market tightened up we might see a large number of people filing bankruptcy because they can't afford to make ends meet. Right now, the government is kicking the can down the road hoping things will turn around. One thing is for sure going further in debt and printing more money has never worked in history and will work now.
Is Bankruptcy Right For You? Talk to Bankruptcy Attorneys Free and Confidential. Licensed bankruptcy attorneys are available. Attorneys will call you to discuss your case for free. Find out if bankruptcy is right for your situation.
Rating of Orlando Bankruptcy Lawyer
Get Online Application at online Bankruptcy Lawyer.
0 comments:
Post a Comment