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As the housing market continues its downward spiral, D.C. officials are getting on board to recognize there may be some kind of problem going on. WTOP reports that the Department of Insurance, Securities and Banking has signed a contract with the D.C.-based Center for Responsible Lending, which will begin an investigation into subprime mortgage lending in the city. The point of the investigation seems to be mostly getting a head count of people with subprime mortgages in D.C. Afterwards, the group will explore ways to help homeowners who now find themselves with balloon payments and interest rates resetting to unreachable levels.
President Bush spoke last week about financial assistance for certain homeowners in refinancing their mortgages and has encouraged Congress to tackle the Federal Housing Administration's dated shortfalls. Meanwhile, calls from Democrats and others are urging the big investment banks to offer, to those in danger of foreclosure, lien options that can then be sold on the market.
Many bills percolating through Congress mimic those of D.C. Council member Mary Cheh, which focus more on measures like curbing predatory lending, in an effort to prevent a repeat of the current crisis. Education for current and prospective homeowners should play a big part in reformation of the lending market. As an editorial from yesterday's Washington Post notes, borrowers are often faced with a void of assistance when it comes to understanding the technical and often very confusing details of mortgages and refinancing. D.C. may want to consider adding their own funds to the $100 million recently approved by the Senate for homeowner counseling.
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Downward spiral?
Where? Here? Don't Thinks so:
Between April 07 through Aug 07
DC median home prices have increased by 2%.
Arlington +5%
Alexandria +2%
Bethesda +15%
Silver Spring +1.1%
It maybe flat, but hardly a downward spiral.
http://www.trulia.com/real_estate/Washington-District_Of_Columbia/
federal bailouts suck
How about instead of passing bills to curb "predatory lending" the DC Public Schools get their acts together and teach some basic math skills to their students so that we aren't revisiting this issue in 20 years.
I have no sympathy for people that fell for what essentially was a "get rich quick" scheme and are no paying the price. Maybe a forclosure will hammer home to them the lesson that there is no free, or "interest only" lunch in this world.
"federal bailouts suck"
Except, of course, for those being bailed out.
RJ, unless I am reading wrong, DC median home prices have increase by .2% (2/10 of a percent). I think you missed the decimal. Yes, flat, as you noted. But the more telling statistic is the number of homes sold...
All Washington Homes
May-Jul 07: 831
Feb-Apr 07: 1,219
May-Jul 06: 1,849
So sales are down 31% from the last quarter and down 55% from same quarter last year. Pretty much a sign of a downslide in housing sales.
The increase in median price can be attributed to many different scenarios. But all told, the drop in number of homes sold probably means that people who would have sold this summer put it off because they didn't want to lose money because they can't get their asking price.
lamaccountant,
Fewer sales is a result of tightening credit, which very well could push prices down some. But there is also a supply and demand issue that will counteract that. DC and close-in suburbs are making it harder and harder to build, and lengthening the lead time for development, so all these people moving here for the jobs the region keeps creating will help keep prices up.
Guest 6. I don't doubt that. That's why prices have gone up, albeit only .2%.
Supply and demand issues are true, but that will also affect rental. Unless someone really wants to own, today, they have the option of renting in the District. Much less money down (in comparision to owning). The availability of rental properties negates much of the price increases.
Again, I'm not saying they won't go up, but you have to look at what properties are going up. You sell a 3 bedroom home in Palisades vs. a 3 bedroom home on U Street vs. a 3 bedroom home along GA Ave, you'll definitely get three different prices. Likely a seller in Palisades will get closer to their asking price. U Street next, and GA Ave last. The subprimers are not buying in Palisades, at least not today. Maybe a year ago.
Federal bailout my ass. Has anyone seen the stats showing Bush's recommended plan would help less than 1/10th of one percent of homeowners? "Compassionate" conservative window dressing. Better luck buying a lottery ticket, ladies and gents...
"Federal bailout my ass. Has anyone seen the stats showing Bush's recommended plan would help less than 1/10th of one percent of homeowners? "Compassionate" conservative window dressing. Better luck buying a lottery ticket, ladies and gents..."
Buying a lottery ticket is exactly what these "subprime victims" were doing to get themeselves into this mess and they knew it. They took a risk and lost. Welcome to the world. Don't look at me to bail you because your "get rich quick scheme" failed to pay off.
What's next, a bailout for people that throw their life savings into slot machines.
At some point, being an adult means taking the lumps you inflict upon yourself. That means foreclosure, possible bankruptcy, and returning to the rental market.