The media is up to their old tricks again, providing mis-leading information to the public with obfuscated facts. I can’t say I blame them, this president certainly isn’t fixing the problems that plague our nation.
Recent reports are that home foreclosure filings are down, the lowest in six years. The media goes onto give accounts how the economy is improving while Americans are benefiting from Obamanomics. Sounds good, right?
There is a quote that reads; “A lie that is half-truth is the darkest of all lies.” And there is the misnomer in the media headlines.
While it is true that foreclosures are down, the reason however has nothing to do with president Obama…it has everything to do with Short Sales, foreign investors and strangulating mortgage lending application policies.
About the same time foreclosures started falling, Short Sales began to rise, and they have risen exponentially the past few years. Short Sales is a life-jacket for the mortgage lenders and home-owners.
What exactly is a Short Sale? A Short Sale, also known as a pre-foreclosure sale, is when you sell your home for less than the balance remaining on your mortgage. If your mortgage company agrees to a Short Sale, you can sell your home and pay off all (or a portion of) your mortgage balance with the proceeds. This avenue can eliminate or reduce your mortgage debt and help you avoid the negative impact of foreclosure. On the whole, lenders have favored a short sale rather than foreclose on a loan. They typically receive more money on a short sale than they can recoup on a foreclosure. There is a lot more required maintenance when they foreclose on a house and in addition, there is the carrying costs the bank has as well as the court fees attached to doing a foreclosure.
The closet-impact affecting the drop in foreclosures is, since the Housing Market Crash, the federal government and lenders have tightened the application approvals, denying as much as 50% of loan applications, according to the Mortgage Bankers Association. This is a far-cry from the all-forgiving Clinton Housing Policies that were directly related to the Housing Market Crash. Clinton envisioned everyone owning a home, regardless of financial standing and ability to pay.
“People with FICO scores under 700, which is still good credit, are getting cut from the market because the government is being so tough on the banks over mortgages that went bad. And the banks are like, ‘I’m not going to loan to these people anymore,'” says Paul Miller, mortgage analyst with FBR Capital Markets & Co. Although they’re complaining about burdensome government requirements, lenders are piling on their own restrictive requirements for borrowers, called “overlays”. If government rules make it difficult for borrowers, bank overlays can make it nearly impossible.
This omitted media information doesn’t coincide with other reports that the housing market sales are up. The sales of homes are up, and not because of Obamanomics and a healthy economy, as the media wants you to believe.
Media reports say the foreclosures are the lowest in six years; foreign investors in American homes have risen greatly the past six years. Russians, Asians, Canadians, Europeans and Latin Americans eager to own a piece of America.Foreign nationals spent $82.5 billion dollars on American homes from April 2011 to March 2012, a significant increase from the previous year – $66.4 billion. Experts believe an even larger number when the next report is released.
October 2013, at the inaugural SelectUSA Investment Summit, a two-day conference designed to promote direct investment and job creation in the United States, Obama said, “Officials at the highest levels, up to and including me, are going to do even more to make the case for investing in America,” More than $160 billion in foreign investments flowed into the U.S.economy last year, 18% was in American housing.
Buying American no longer means purchasing American-Made products, it means purchasing American products made by foreign investors. What good does it do America to stimulate the economy with foreign dollars and lose all that is America? While it certainly keeps our economy afloat, it sure stings the heart of real America.