Santa Barbara real estate forclosures are minimal, and area home owners are thankful

The Santa Barbara real estate market has proven itself through good markets and bad, that the old real estate tenet of , Location, Location, Location is still enforce!! The Santa Barbara properties market continues to out perform most markets in the US and the world for that matter. Just review many of our “Santa Barbara properties outlook” post on this site for proof.  Santa Barbara area homeowners are thankful for these facts. With all the negative national press about real estate, it is still a local phenomenon.

Althought the Santa Barbara real estate market will see little of it, not much detail has emerge from the Treasury department about $50 billion housing rescue plan, which has caused the big banks to temporarily halt foreclosures. J.P. Morgan Chase announced it would stop foreclosure proceedings, through March 6, “we will not add any new owner-occupied residential loans foreclosures that are held by JP Morgan Chase.” as reported by Diana Olick of CNBC and excerped here.

Citigroup CEO Vikram Pandit committed to virtually the same Wednesday, before the House Financial Services Committee, and issued this statement, extending their foreclosure hold offs to March 12th. “Today’s announcement expands on Citigroup’s current foreclosure moratorium in where Citigroup does not initiate or finish a foreclosure sale on any eligible borrower where Citigroup owns the mortgage, the borrower seeks to stay in the home, which is their primary residence, is working in good faith with Citigroup and has sufficient income for affordable mortgage debt.”

JP Morgan also says it will stop on loans they hold, but Citigroup is only acting on Citigroup owned loans. One of the largest impediments to foreclosure mitigation is the fact that most loans are held by outside investors. Which actually could be the blessing in disguise.

As for any new details on Geithner’s new plan, except for a haandful at the Treasury, none can expand on the recent leak that it would involve some sort of standard modification process that the government (read “US Taxpayers”) would subsidize.

But on top of all that rhetoric, came the announcement from the “Office of the Comptroller of the Currency (OCC)” along with the “Office of Thrift Supervision (OTS)”. These are the ones who gave a report in December on re-default rates on mortgages that had been modified (nearly 50-60 percent!) that gave everyone a harsh reality check, that this yet again, poorly supervised or hastily put together program, simply forestalls the inevitable, and at taxpayers expense. And now because of all that concern, they are expanding their data, which, as we’ll see, is more wasted resources. Ultimately the market will prevail with or without programs paid by taxpayer money to manipulate it.

John Dugan, Director of the OCC said, “I’m hopeful that the numbers we collected already and the numbers we collect in the future, will help this going forward”. Unfortunately, statistical analysis is always in hindsight and only tells us if a program has worked or not, based on whose analyzing the data, and does nothing to ensure the program will wok at all, particularly in the case of brand new programs with no history of success or failure. So, by the time we figure out if any of this has worked, what’s done will be done, and we’ll have great detailed analysis of how clever we were to have paid to much for the program, and the added bonus of paying too much for the analysis of same. 

 “We’ll then take the new categories and for each, figure out what was the re-default rate in each of those categories,” Dugan explained. This data of course would be very helpful to the government bean counters crafting a massive mortgage modification plan, and of course to homeowners who might otherwise rely on their own resourcefulness and help themselves out of their situation, but might now be induced to sit and wait for government entitlements, “expecting” to be saved by government, or worse, become resourceful in manipulating the goverment program itself, which has already been evidenced. (Didn’t Democratic Icon John Kennedy say “Ask not what your Country can do for you, ask what you can do for your Country. One of the greatest statement of US citizen’s right to self determination. What happened to that once prevalent American sentiment? The presumption that government needs to protect us from ourselves.) And of course in perfect harmony with this perfect storm of preposterous government, Mr. Geithner won’t get those stats until long after he’s announced his hastily constructed social mortgage plan. Dugan, however, assured, “I know for a fact they’re taking re-defaults into serious consideration.” Re-defaults we know are simply forestalled foreclosures that happen anyway, but only after the US taxpayers subsidize the stalling process, which in turn delays that housing inventory from becoming a performing asset, which of course is ultimately what the economy needs to be normalized.

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