Tsunami of Home Foreclosures to Hit US

[Soul Crusher]

Tsunami of Home Foreclosures to Hit US: Economist
Published: Tuesday, 25 Aug 2009 | 5:39 AM ET Text Size By: Robin Knight
Assistant Web Producer

A tsunami of home foreclosures is set to hit the US as banks are unable to keep bailing out tenants that can’t afford their rent and struggling home owners show their anger at the financial crisis by giving up on their mortgage, David Karsbøl, chief economist at Saxo Bank, told CNBC.

“I believe we are about to see a tsunami of foreclosures in the US,” Karsbøl said.

“A lot of homes have been held back because if the banks are foreclosing on them they will have to do a writedown on the mortgages they have on their balance (sheets),” he said. “That’s why they have been reluctant to do so,” he added.

There is also a growing anger in the US population about the bailouts and excessive bonuses on Wall Street, according to Karsbøl.

Meanwhile, “the fact that many homeowners are allowed to stay in their houses without paying on their mortgages begs the question: Why should you pay on your mortgage when your neighbor doesn’t?” Karsbøl said.

Karsbøl added that the notion that unemployment in the US is declining is not true because of a sharp fall in the participation rate. 

Karsbøl said that the surge in foreclosures should sideswipe any rally in stocks before long.

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Green shoots. 

Anyone who thinks we are anywhere near a recovery is simply not looking at reality. 

[240 is Back]

Anyone who thinks we are anywhere near a recovery is simply not looking at reality. 

hey, those folks bought houses they couldn't afford.

maybe the fact their rent will be slashed 500 a month will mean they'll finally start living within their means.

[Soul Crusher]

hey, those folks bought houses they couldn't afford.

maybe the fact their rent will be slashed 500 a month will mean they'll finally start living within their means.

If the banks were allowed to fail like they should have, these mortgages could have been reduced or dealt with accordingly. 

Now, the taxpayer is on the hook, and these people are stuck with houses were hundreds of thounsands less than their mortgage. 

You can only delay the inevitable for so long. 

[240 is Back]

If the banks were allowed to fail like they should have, these mortgages could have been reduced or dealt with accordingly. 

Now, the taxpayer is on the hook, and these people are stuck with houses were hundreds of thounsands less than their mortgage. 

You can only delay the inevitable for so long. 

if the banks were allowed to fail, that pile of money you're bragging about would be worthless at the moment.

If the banks were allowed to fail, we'd have 50% unemployment or worse.

Without money, all major american systems (auto, healthcare, housing) wuold have taken a far greater hit.  And you don't have to take my word for it - both the dems and the repubs saw the gravity of the situation and passed the bailout bill. 

Being "right" while sitting on a big pile of charmin currency is one thing you seem to desire.  I'd rather be wrong with a functioning society.