Housing expert urges federal government to buy foreclosed houses
According to Rick Sharga, senior vice president at RealtyTrac (www.realtytrac.com), if the government bought all 2.5 million mortgages in foreclosure this year, the total cost would be anywhere from $220 - $440 billion, still an enormous amount of money, but less than the proposed $700 billion bailout agreement.
Some 2.5 million homes are likely to be in the "process of foreclosure" during the coming 12 to 18 months, according to a news release. If a typical home has an average sale price of about $220,000 (many homes now facing foreclosure were financed several years ago with two loans, thus first loans are often significantly less than current market values), and if the average mortgage is $176,000 (80 percent of market values) then the total value of such mortgages would be $440 billion. If the refinancing program was limited to half of the homeowners who will probably lose their homes to foreclosure, Uncle Sam would need to provide loans worth $220 billion.
Some 2.5 million homes are likely to be in the "process of foreclosure" during the coming 12 to 18 months, according to a news release. If a typical home has an average sale price of about $220,000 (many homes now facing foreclosure were financed several years ago with two loans, thus first loans are often significantly less than current market values), and if the average mortgage is $176,000 (80 percent of market values) then the total value of such mortgages would be $440 billion. If the refinancing program was limited to half of the homeowners who will probably lose their homes to foreclosure, Uncle Sam would need to provide loans worth $220 billion.
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