"Underwater" Housing

E-mail to Congress:

EIN News says, "Almost 1 in 4 U.S. Mortgage Borrowers Owe More Than Their Homes Are Worth. Nearly one in four U.S. borrowers owe more on their mortgage than their home is worth, a worrisome sign that the housing recovery could be threatened by a wave of defaults, the Wall Street Journal reported on Tuesday. (msnbc.msn.com)".

This is a shame, it was caused by a social idealistic group in government to move people into houses whether they could afford them or not. This created an artificial construction boom. It took several years to create this damage and, and it will take several more years to have it undone.

There is now surplus housing, which is why market prices are low and considerably below the inflated values caused by the previous construction boom.. New housing construction is at a low level, which it should be, until the market catches up with housing availability. Anyone now making mortgage payments on a higher loan than the present market value of the house should continue to do so. When the market value of a house was higher two months after an original purchase, that was unrealistic. There was no actual profit, because the house was not sold. Similarly, a present low market value is unrealistic, because the house is not being sold. It is a place to live.

The only justifications for now selling and either renting or purchasing a lower-cost house is if one is in the real estate business or one cannot meet the mortgage payments. If the latter, one must take one's lumps after having been suckered into a bad financial deal by trusting government. Government will now do its best work by staying out of the mess it created and letting market forces correct the error.