Tidal Wave prediction for 2012 reflected in FED report : foreclosures and eviction

 my notes: While I think the glut of houses on the market is caused by too high of prices and a trickling of houses onto the market by HUD (government),the scope of this report by the FED is sounding a warning dong to our country.  If we as a nation do not wake up and do the hard job of extinguishing fraud (those are not contracts when they are fraud based) and returning homes to homeowners and jailing those that lie under oath.  We cannot benefit as a country and grow while hiding fraud and evil harboring wrongdoing.  The country needs to clean up ethically, morally and legally or we are dooomed to fail!!!!! For those who can't read small print... .just click on your CTRL button (bottom left on keyboard)  and the Plus sign (by backspace) to enlarge size of page.




January 4, 2012
The U.S. Housing Market: Current Conditions and Policy Considerations
The ongoing problems in the U.S. housing market continue to impede the economic recovery.
House prices have fallen an average of about 33 percent from their 2006 peak, resulting in about
$7 trillion in household wealth losses and an associated ratcheting down of aggregate
consumption. At the same time, an unprecedented number of households have lost, or are on the
verge of losing, their homes. The extraordinary problems plaguing the housing market reflect in
part the effect of weak demand due to high unemployment and heightened uncertainty. But the
problems also reflect three key forces originating from within the housing market itself: a
persistent excess supply of vacant homes on the market, many of which stem from foreclosures;
a marked and potentially long-term downshift in the supply of mortgage credit; and the costs that
an often unwieldy and inefficient foreclosure process imposes on homeowners, lenders, and
communities.
Looking forward, continued weakness in the housing market poses a significant barrier to a more
vigorous economic recovery. Of course, some of the weakness is related to poor labor market
conditions, which will take time to be resolved. At the same time, there is scope for
policymakers to take action along three dimensions that could ease some of the pressures
afflicting the housing market. In particular, policies could be considered that would help
moderate the inflow of properties into the large inventory of unsold homes, remove some of the
obstacles preventing creditworthy borrowers from accessing mortgage credit, and limit the
number of homeowners who find themselves pushed into an inefficient and overburdened
foreclosure pipeline. Some steps already being taken or proposed in these areas will be
discussed below.
Taking these issues in turn, the large inventory of foreclosed or surrendered properties is
contributing to excess supply in the for-sale market, placing downward pressure on house prices
and exacerbating the loss in aggregate housing wealth. At the same time, rental markets are
strengthening in some areas of the country, reflecting in part a decline in the homeownership
rate. Reducing some of the barriers to converting foreclosed properties to rental units will help
redeploy the existing stock of houses in a more efficient way. Such conversions might also
increase lenders’ eventual recoveries on foreclosed and surrendered properties.
Obstacles limiting access to mortgage credit even among creditworthy borrowers contribute to
weakness in housing demand, and barriers to refinancing blunt the transmission of monetary
policy to the household sector. Further attention to easing some of these obstacles could
contribute to the gradual recovery in housing markets and thus help speed the overall economic
recovery.
- 2 -
Finally, foreclosures inflict economic damage beyond the personal suffering and dislocation that
accompany them.1 In particular, foreclosures can be a costly and inefficient way to resolve the
inability of households to meet their mortgage payment obligations because they can result in
“deadweight losses,” or costs that do not benefit anyone, including the neglect and deterioration
of properties that often sit vacant for months (or even years) and the associated negative effects
on neighborhoods.2 These deadweight losses compound the losses that households and creditors
already bear and can result in further downward pressure on house prices. Some of these
foreclosures can be avoided if lenders pursue appropriate loan modifications aggressively and if
servicers are provided greater incentives to pursue alternatives to foreclosure. And in cases
where modifications cannot create a credible and sustainable resolution to a delinquent
mortgage, more-expedient exits from homeownership, such as deeds-in-lieu of foreclosure or
short sales, can help reduce transaction costs and minimize negative effects on communities.




NOTE:  There is more but this is the part that grabbed me. After 16 billion in unauthorized bailouts that were kept secret and after official bailouts that produced bank profits and no tax revenue - this is incredibly dismal. God help us the economy will probably improve before the election but afterwards it will be business back as usual unless there is a sweep made in this country to return back to honesty and equity.