A Million Empty Homes, but No Room at the Inn

Walk into just about any church this time of year and you will find a crèche, with a manger, Mary, Joseph, some shepherds, sheep and cattle. In the story of Jesus’s birth, as told by Matthew and Luke, there was no room at the inn for a tired pregnant woman and her weary spouse. As a result, the newborn Savior of the World was laid in a bed of straw in a cave.

When I look at these nativity scenes, I think about the thousands of American families who also have no rooms to call their own.  HUD reports that in 2010, nearly 242,000 persons in families were homeless on any given night.  Nearly one million children were homeless at times over the course of the 2009-2010 school year, according to public school officials.

Yet more than a million homes sit empty in cities and suburban lots and rural landscapes. More than 4 million homes have been foreclosed on.

Many foreclosed homes are now filled with mold. Others have been turned into marijuana farms.  A house in Detroit was covered in ice by artists who were making a point about the frozen housing market. Occupy Our Homes movements are springing up in cities around the country, demanding that banks negotiate with homeowners instead of foreclosing on them. 

The housing crisis is a human crisis. It is also an economic crisis that perpetuates the human crisis.

Back in May, the New York Times reported that economists were worried that growing inventory of bank-owned homes was further depressing home values, leading to more distressed sales or foreclosures. They estimated it would take three years or longer to sell all of the houses currently owned by the banks.

A few ideas about how to handle this enormous problem have been circulating recently.

In September, Glenn Hubbard, Dean of the Columbia Business School, along with Alan Boyce and Chris Mayer issued Streamlined Refinancings for up to 30 Million Borrowers, proposing a mass refinancing program that could benefit as many as 30 million borrowers who have government-backed mortgages. Unlike the other government programs to date, this plan would permit homeowners who are current on their mortgages to refinance at today's low rates and with reduced closing costs. Lowering the mortgage payments for these homeowners could generate savings of $70 to $100 billion per year, which would be pumped into the economy, increasing market demand, creating jobs, and stabilizing the housing market.

Tackling the problem of already foreclosed homes, the Federal Housing Finance Agency (FHFA), HUD, and the Treasury Department has asked private investors, industry stakeholders, and community organizations to propose  ways that homes currently held by Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) could be brought back to the market--e.g. through programs for previous homeowners to rent properties or for current renters to become owners through a lease-to-own option.

Will any of these ideas work?  What are the drawbacks? Are there innovative approaches in your community to keep families in their homes that could work on a national or regional basis? What would you do with these empty houses?  Post your ideas here.

We need to keep people in their houses instead of adding to the thousands of families seeking shelter each night.  And open the doors to those that sit empty because of an economic crisis that refuses to resolve. Because while we sing “Away in the Manger” this Christmas season, we know that for too many women, men and children, a night without a home is not that far away.

Comments

[Allanzkie]

The money has already been made in that marekt Now it is saturated with a lot of people trying to get what little is left It is VERY rare to score a no money down foreclosure property less than 1 in 1000 if youre lucky Actually, these people are selling their programs, that is where the money is now They made their money already and pulled out some time ago and now they are making money by selling these programs' to others.With these sub-prime mortgages falling through, the real estate marekt is going to tighten up in the next 12-18 months The mortgage terms we could get in the past 7-10 years will be no more . this 0 down mortgages will be harder to get banks have already begun changing and making it harder to get mortgages the low/no money down and/or bad-poor credit mortgage loans that is .To do a $0 down, you have to have EXACT circumstances to happen in order to do that, which rarely happens and also a lot of work on your part to accomplish that and to make it happen I have picked up a few of these books and have studied their methods and analyzed these systems It is possible but just that . possible but the odds are against you They are not out to teach you how to get rich they are out to sell you their books, tapes, DVD's and to take their training classes'.They are good at what they do, and that is being sales persons selling snake oil Lot of people are hurting for money in these economic down times and getting rich in real estate' seems like a dream, a possibility to a path back to when times were better but these people seling their systems are getting richer doing just that, selling false dreams to the masses, which their system does work but only in ideal conditions and in only an exact circumstance or situation must occur .You will have better opportunities in getting experience and/or an education in business and starting up your own company than buying into one of these systems, and like the lottery, hope you can hit the big kahuna in a lucky deal that chances are that will not happen . with the tanking real estate marekt ..Better get your own business and buy up the real estate when prices drop, with positive cash flow from your business than to overfinance real estate in a marekt that is very risky at this time . and loose your shirt when a downturn hits the area where therreal estate is located in.

[Antonio]

During the housing boom of the last few years, lenerds issued mortgages to many buyers who were stretching themselves financially to buy a home. To make it possible for the buyers to make the mortgage payments, the lenerds issued adjustable rate mortgages on which the interest rate and monthly payments are very low during the first few years, then increase in future years requiring higher monthly payments on the mortgage. Many speculators bought houses with such loans in the hope of selling them for a higher price.Now the housing market is in a slump, and a lot of the mortgages are hitting the time when monthly payments are increasing. Home buyers who cannot make the higher payments are having trouble selling their homes and many of the loans are going into default. That means that the banks that issued these mortgages now have to repossess the homes on which payments are not being made. Mortgages are in the news now because the number of defaults and repossessions is much higher than normal, lenerds are in financial difficulty getting study with houses that are not selling, and buyers are losing their homes because they cannot make the monthly payments.