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View From The Middle
Now, we know it's a newsletter and, while it's not necessarily handed out just to make the members feel good, it seems the information leans a little bit to the optimistic side. For example, using George Orwell's "doublethink," the communiqué notes that the sales of existing single family homes in New York State in October "rebounded from the sluggish numbers posted in September." The next line in the newsletter says that, while the market posted positive numbers in the month-to-month comparison, "it did experience a drop in both sales and median selling price compared to the same period a year ago." Say, what? Doublethink! NYSAR's CEO, Charles M. Staro, was quoted as saying, "We continue to project a similar market (rebound in sales & positive note) through the end of 2007 with the expectations of a rebounding market as we move through 2008." We can only hope, Mr. Staro! As of now, fewer new homes than were originally forecast were sold throughout the country last month. And the prices are dropping to a point where people who paid high two and three months ago are now looking at huge slashes in their own equity. A televised report last week (I think it was on ABC-TV) cited one man's dilemma where he paid $750,000 for his home in the Midwest last May. He was ecstatic as he watched it build to just short of a million bucks within a couple of months - and then things turned around. Now his bank is on the case, threatening to foreclose after raising the mortgage and he said the house is now worth, maybe, $450,000 and expected to descend more. Meanwhile, as civic associations here complain about how they wish "downzoning" would take place faster because there had been so much construction going on (old houses coming down and new, brick houses going up), they might be assuaged by the lack of activity in construction on those lots in the middle of Seaview Village now. Those signs illegally posted on telephone poles all over the place telling you they'll give you cash, cash, cash might be true, but you know these guys will never buy it unless they can make lotsa bucks on it. You know who the loser is going to be in that game! The "trickle effect" that President Ronald Reagan had in mind, where the prosperity of the country would depend on the general public supporting big business and big business in turn "trickling" their prosperity down to the rest of the country was a truly wonderful philosophy! But....uh....what if big business decided to keep all those bucks and the philosophy became "the hell with the little people, let's make money?" If that sounds like I don't trust them, you couldn't be more correct! Remember a movie called "Wall Street," where Michael Douglas announced to his stockholders that GREED IS GOOD? Last week, Senator John Sampson hosted a forum (see page 5) where he and others answered questions and generally assisted those in our community who were in danger of losing their homes to foreclosure. Sampson wisely had someone from the Department of State and another from the Department of Banking to tell scared forum-goers what to do in case the home foreclosers were pounding at the door. Sampson also warned of some of the dangers they would encounter with "new" lenders who promised to get them out of the hole. They supposedly dug for themselves (with a little help from unscrupulous lenders who told them their mortgage wouldn't be a heck of a lot and then raised the mortgage to more than they could afford. Thus, the mortgage crisis). The main thrust of the meeting was to assure the homeowners that, despite that guy at the door, all might not be lost and that, apparently, one of the keys is being able to talk to the lender. In most cases, they'll at least talk and try to work things out, unless they're engaging in doublethink again. Now the feds are getting in on the game, finally, mostly because they're scared of the impending recession - and don't kid yourself, it's coming. They want to freeze some sub-prime mortgage rates right where they are now. Of course, this won't help those whose homes have already been foreclosed upon or with whom the proceedings have already started, but it might enable current owners to gather their thoughts and resources and, however difficult, build up some equity and credit and, perhaps, be able to get a bank loan with lower interest in the near future. The rub, in this case, is whether the banks will go along with it. Do they want to look - or be - compassionate and help out their fellow desperate American homeowner? Or do they want to rent that "Wall Street" video and listen to Michael Douglas talk about GREED? | |||||
