Art Fried keeps reading more and more about the real estate/foreclosure problems in US in general and Arizona in particular are experiencing.

1. Art Fried throws light on foreclosure issues

2. Art Fried keeps reading more and more about the real estate/foreclosure problems in US in general and Arizona in particular are experiencing. Everyone is running for cover and pointing fingers. Everyone has an excuse and there are no answers.

3. There has been so much “noise” coming from the powers that be the feds and the banks, that all seem to have forgotten that the whole idea behind TARP, says Art Fried. The $750 billion dollar federal program was to help 4 million Americans stay in their homes. However, the reality is just the opposite. The banks make more money foreclosing on a house then they can by helping the suffering homeowner.

4. This is what happened from a purely a real estate perspective, exclaims Art Fried. The bottom fell out of a market that was fueled by “Creative Loans” and “Greed”! Home prices climbed and climbed out of control with no end in sight. Loans were granted to literally anybody who could fog a mirror or had a pulse with little or no money down and everyone was making money hand over fist. It got even worse as the economy surged and interest rates dropped.

5. Refinancing your mortgage became a natural way to suck the money out of the artificially inflated value of your home and people went back to the bottomless well time and time again. And then the bottom dropped out and that four walled ATM ran out of money. The economy turned, people lost jobs and income dropped. That big ATM machine ran out of money and people were stuck. They could not cover their mortgage payment let alone many of their other bills and the dominos started to fall and the foreclosure “epidemic” was on.

6. Homes started losing value at double-digit increments while those creative loans did not change. People started to panic and put a tremendous amount of heat on the government to do something and they did. The country breathed a collective sigh of relief when TARP was introduced. $750 billion to keep Americans in their homes! Those sigh of relief turned into a moan when nothing was done. The loan modification was to be the savior, the banks, the ones who originally wrote those “creative loans” were charged with implementing this program, and all are aware of the results.

7. periodically for decades. e loan modifications that were done in reality did nothing but postpone the inevitable. Once again, short-term thinking came into play and some people got some monthly relief but in the long run would wind up paying the banks even more money then they would have in the first place. They never did address the real issue and that issue was that the market needed to correct itself which it has had to do periodically for decades.

8. Real estate prices were artificially bloated and needed to come back in line. In reality the only thing that makes sense was to adjust the principle of the loan to come in line with the actual value of the home. Without doing that, everything is just a postponement of the inevitable.

9. Art Fried further explains about the whole process in more of his blogs.

10. Thanks