Whose economy is doing good if the amount of foreclosure homes is increasing?
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Bill Gates is adding a bathroom so hes doing well.
That's who is benefit ting, the rich with substantial monies in stocks and bonds, the coupon cutters.
The average Joe has seen his job go south, his benefits disappear and his pension used and tossed up by the company he thought was 'his'. The inability to find a way for health care to be universal, has left almost 50% of the bankruptcies in the country due to uninsured hospital costs, but taking on the insurance companies isn't something that's going to happen soon. The last congress even made bankruptcy more difficult for poor Joe, but not for big business. Builders don't want to build affordable housing so they build big wasteful Mc Mansions made of plastic that cost so much no one who lives in them can afford to stay home long enough to enjoy them.
Bush and his friends are benefiting, when it hurts them, the interest rates will come down, there will be some help for health and foreclosures will diminish, til then,.well Bill really needed his tenth bathroom, its a big house.
well... unfortunately they can have a connection... but it's really due to a WAY overinflated housing market and banks giving very risky loans to those who make low incomes...
interest rates were low, banks gave low interest variable rate loans to people who could barely afford them on houses that were way overpriced... now, when the economy improves a little, rates go up, overall and for those with variable rate loans... and all of a sudden their payment goes up $100/200 when they were eating ramen just to make it by already...
so, foreclosures go through the roof, which will probably weaken the economy again, maybe drop rates again, and start he whole thing over... YAY!
(interest rates are dropped in poor economies to stimulate spending, but increased to stabilize the economy, when the economy rebounds)
The high rate of foreclosures is a result of loose lending policies by banks and people borrowing beyond their means.
It has nothing to do with "whose economy" it is.
The reason home foreclosures are increasing has nothing to do with the strength of the economy. There has been reports of a housing bubble for several years now and the artificially inflated prices finally reached the point where the bubbly has burst and the market is correcting itself. That coupled with so many people getting into the market late in the game and buying houses more expensive than they could afford has led to the large number of foreclosures. Its both the fault of these unsophisticated buyers and the mortgage companies who would lend up to 100% on interest only loans that has caused the problem. Not the economy.
Just to put this in perspective the reason that the foreclosure rate is as high as it is is due to all the people that bought more house than they could afford under an ARM (adjustable rate mortgage) when the house buying boom was at its height a couple of years ago.
So you are saying that the government should not have allowed them to try to buy a home?
Well, the foreclosure thing the US is having would not be a great indicator of how the economy is doing. It is an indicator of how idiotic lenders have become in the US. If you read up on these forclosures, most of them involve subprime loans. These are loans given to people with bad credit or no down payment or some other reason why they would normally be turned down for a loan. This is not that bad of a loan, however, the subprime lenders were giving out loans to people who just should not have had them. Such as people making way too little, or people who are already in over their heads in debt. Also, these lenders would find these people and convince them to take out even larger loans than they should have had. They would use an ARM with a 2 year teaser and after the 2 years were up, the rate would go up and sometimes people would see their mortage payments almost double. The people with the mortgage would not be able to pay it and would soon fall behind on payments and bingo. You have foreclosure.
This messed up situation could result in foreclosures in the worst economy or the best economy. If you issue debt to people who cannot repay it then you are going to lose money. The state of the economy will not change that fact.
Any country who has their economy denominated in anything besides dollars is probably doing better than the US right now.
As foreclosure go up and homeowners can't afford their payments, the Fed may have to lower interest rates to make easy money again. That's in an effort to boost the economy through looser lending policies with lower rates.
But for people/economies that hold mostly Euros, for example, the lower interest rates will make other currencies worth more, in relation to the dollar. As interest rates sink for dollars, other currencies' values go up.
The foreclosures themselves are neither good nor bad to any other economy right now; it's much more important to see what the reaction to the foreclosures will be. Lower rates will mean a devalued dollar, higher rates will mean even more foreclosures.
The Fed is in a tough spot right now, so let's see what happens, shall we?
ForeclosureFish
http://www.foreclosurefish.com/...
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