Cost burden ….
The Great Recession has exacerbated the housing affordability challenges that had been building for a half-century, according to researchers at the Joint Center for Housing Studies of Harvard University.
The Center says its last measure of home-cost challenges showed that 9.3 million homeowners paid more than half their income on their mortgage – and that was in 2009. With the state of the labor market only worsening since then, and not only unemployment but underemployment plaguing more and more American families, the figure has undoubtedly risen.
While low-income households are most likely to have such severe burdens, the Harvard researchers point out that cost pressures have been moving up the ladder to affect more moderate- and middle-income households. In fact, rates of severe-cost burden among households making between $45,000 and $60,000 per year has nearly doubled since 2001.
Now know that many owners cannot refinance because of list equity and overly rigid appraisal rules. So many are stuck in high interest rates and can’t advantage themselves to the 4.5% rate that is out there.
These are variables that lead to hardship.
Banking and government need to:
1. Loosen appraisal rules back up and remove the third party companies who make banks feel good but screw up the process
2. More modifications should occur an be rewarded with principal write downs – after all Obama camaigned on this -but we will never see it because the halls of Washington are flooded with bank lobbyists- and banks are scared if principal deduction modifications.
3. Arm loans that are resetting are ticking tine bombs if they are not modified – focus should be out here to ease off and make modifications on a wide scale .