Any help from foreclosure bill too little, too late for Michigan
Given all the rhetoric about congressional attempts to help homeowners facing foreclosure, it’s hard to know whether the current plan is so pathetic it will help only a small fraction of people in trouble, or whether it’s so comprehensive it could drag down the federal budget to the tune of billions of dollars.
But the plan is voluntary on the part of lenders — they have to agree to write down home loans to as little as 85% of market value — and that puts suspicion heavily on the side of any help in this bill being too little for homeowners, and too late.
Way too late in the case of Michigan. The ongoing damage here involves waiting for bank-owned homes to get new owners, so home buyers and sellers can have some confidence that the market has bottomed out. (For a look at bank-owned homes in your neighborhood, go to www.realtytrac.com and enter your ZIP code.) Buyers tend to wait if they think they’ll get a better deal in six months or next year; many sellers won’t put their homes on the market at all if they know they have to compete with foreclosed homes being sold at auction.
Meantime, it’s not clear that the federal government has any solutions for people who got in trouble with their home equity lines or other types of adjustable-rate deals and can’t refinance simply because their home isn’t worth enough anymore to allow a lender to restructure their debt, even if they can afford it.
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